Key Bitcoin Indicator Points to Period of Calm in Crypto Market

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Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Now, an indicator called the volatility risk premium is suggesting the same, signaling a relatively low volatility market environment ahead, which could be seen as a positive development by long-term investors.

The one-month VRP has collapsed to 2.5% from 15% since the Bitcoin blockchain implemented mining reward halving on April 20, according to data tracked by Bitfinex's analysts. The VRP calculation is based on the gap between Volmex's bitcoin 30-day implied volatility index and one-month realized volatility .

In other words, uncertainty has ebbed and market participants foresee more predictable market conditions.

 

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