Thread by @2210ft

#Bitcoin update
1/n
Today: Volatility Analysis.

The next leg up could take us to >100k if volatility dynamics repeat from past cycle.

Thread👇

2/n The first indicator "ATR-Ratio" shows the ratio of short term (10 days) to medium term volatility (100 days). Higher values indicate higher volatility then trend and vice versa.

3/n
In early 2017, we have interestingly seen a very similar volatility pattern to the current one, i.e. a pattern with three spikes followed by very low vola until late April. The next move higher in 2017 was over 2x from there.

4/n
The second chart shows the relative ATR in % over 100 days. A hot debate is whether #Bitcoin will see declining returns over time. This is somehow intuitive as with a larger market cap more and more capital is required to move the price - longer term this makes sense.

5/n
But do we see this currently? Comparing the current volatility to the last cycle actually shows no decline in volatility. Actually, vola was higher and - no surprise - this cycle has also seen higher returns over the past months.

6/n
So at least as of now in this cycle there are no signs of "slowing down". The next leg up could happen soon if vola dynamics from the previous cycle are a guide and it could be massive. In 2017 it was over 2.2x until June.
Let's see.