Decreasing volatility is not only a "perception", like some have guessed, but real:
The Bitvol Index, which measures price volatility, is going down since new year approximately.
Apart from the reasonings in this thread (I agree to some, while not to others, see below) this phenomenon seems to be a common fact in all advanced bear markets Bitcoin has seen until today. In 2014, for example, after 2-3 months approximately the price swings became much smoother and gave the illusion of "predictability" and "stability" (I remember it was around the $400 price level). You can see it in Bitvol's graph (click on "All").
I agree with Hydrogen that one of the reasons may be the behavior of newbie traders which tend to be vulnerable to FOMO while panicking when they smell a crash. With time, they quit
or learn that not
every movement means "da moon" or "death".
2. A large amount of Bitcoin hoarders are not paying with bitcoins when the price is lower. They get less value for their money, when the price is low. So when there are not a lot of transactions on the exchanges, the price will be more stable.
Hoarders, or more properly
hodlers, don't impact the price volatility at all...because the don't transact.
Low price = less transactions & trading = less volatility.
I've corrected this for you.
Fewer transactions = less volatility and therefore a narrow price range over a period of time.
I don't believe in a negative correlation between the number of transactions and volatility. Normally, it should be the other way around: when there are many transactions, then price should be more stable, because this means "thicker" order books and so the volume needed to change the price is bigger.
The fluctuation of Bitcoin price posted on the market treed, is the result on the volume of trading on crypto currency market, the movement on investment at any given time the lesser the possible effect on the said market price of Bitcoin, other indicator are maybe, the issue posted vs. Bitcoin the are the never ending issue on Banned, Scammer, and the issue s on Regulation, once this issues posted in the social media or in the market preview, it would triggered the movement on the price value whether in the fraction of point or even higher point, it all depend on the level on reaction on the market.
However, it's difficult to generalize here - I think the
type of transaction is the key.
Direct buy/sells of goods and services without fiat involvement should stabilize the price, as well as simple
limit orders at exchanges. Transactions that boost volatility, in my opinion, are 1)
market orders and 2)
advanced order types like stoṕ-loss orders (because they tend to lead to extreme price swings when they're triggered). These two kinds of transactions are more likely in "FOMO" and "panic" phases, and we're currently not in this kind of phase, so there is less activity of these.
A stronger reason for low price volatility is the lack of news or developments, good or bad during the recent weeks/months. There hasn't been much news about Bitcoin. This is probably a good thing.
Mmh, I'm not so sure. I consider the launch of the Lightning beta a very important positive announcement. But where you're right is that this news didn't "make it" into the mainstream media, so outside our filter bubble nobody noticed it.
