As the Hash Rate Plummets, Bitcoin Volatility Reached an all-Time Low

Key Ideas:

• The hash rate of the Bitcoin network is also gradually decreasing, reaching 229 TH/s (terahashes per second).
• The decrease was attributed to Texas miners ceasing operations because of severe weather and increased demand for electricity infrastructure.

On-chain data indicates that the volatility of the Bitcoin market is at an all-time low. Crypto researchers have been monitoring the historical volatility levels of Bitcoin, and they have peaked.

Volatility last hit this level in the latter part of 2018. Similar to the current bear market, this one saw a year-long decline in crypto values.

When BTC fell under $3,200 on December 15 following the previous flush out, volatility increased once more as the year came to a close.

The new low in Bitcoin volatility was confirmed by more analysts. The asset has fluctuated in price for the last six weeks between $15,700 and just over $18,000. Since much of the world is on holiday, market activity is probably not going to pick up until the following month.

Prior periods of low volatility had been followed by a spike, it was noted. With one exception—October 2018—every time volatility fell below value "1," a positive rise followed.

The volatility of Bitcoin is not the only signal that has decreased. Although the network hash rate is also dropping quickly, there is no guarantee that the two are connected.

According to Blockchain.com, hash rates fell to 229 TH/s (terahashes per second) on December 25. This represents a 16% decline from the record high set in the beginning of November.

The present decline was attributed to Texas miners ceasing operations as a result of severe weather and rising demand for electricity infrastructure. Although it hasn't happened yet, worries have been expressed regarding another sell-off of distressed miners.

Throughout the weekend, bitcoin values were largely constant and are now approaching $16,800 for the Christmas season. BTC increased to a five-day high of $16,895 on Monday. On December 16, the asset fell below $17,000; since then, there has been no appreciable change.

At $846 billion, the market value of cryptocurrencies is quite close to where it peaked in 2017. Most experts believe that markets are close to the bottom of this disastrous cycle after a 72.5% decline.