Kraken Intelligence, our team of in-house research experts, has released its Bitcoin Volatility Report for January, 2020.

Key Takeaways

• BTC’s +30.3% price appreciation marked its best start to the year since 2013.
• Stronger 1-month correlations with gold, oil, and US treasuries suggest that the Iran-US conflict and the coronavirus outbreak impacted bitcoin, supporting the notion that bitcoin continues to mature as an alternative asset class to traditional “risk-on” financial assets.
• Looking back to 2011, January volatility was 38 percentage points below the monthly average of 96%; should February follow trend, we can expect a continued uptrend in price and less volatility.
• Last month confirmed that address balances between 10 BTC – 100 BTC are in an “accumulation” phase, while those with a balance of 1,000 BTC – 10,000 BTC are exiting a “wait-and-see” phase. History suggests that as both cohorts exit their respective phases, volatility tends to re-enter the market.
• Shifts in sentiment and open interest in January indicate greater volatility in the coming weeks or months.

If historical trends continue, volatility may re-emerge in the weeks and months ahead.