A recent report from the crypto-derivative platform, Zubr, found that despite being extremely volatile compared to traditional asset classes, Bitcoin (BTC) maintains a „market-balanced“ nature most of the time.
The report came out just days after Bitcoin climbed past the $12,000 mark and its volatility finally recovered from a multi-year low.
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Using data from CoinAPI, a data provider in the crypto market, Zubr discovered that changes in Bitcoin prices are often accompanied by almost symmetrical movements in the opposite direction, creating opportunities on both the positive and negative sides.
According to Zubr:
„Most of the time, Bitcoin will almost always mimic the exact percentage increase with a percentage decrease on the same day.“
Normally, this mirror effect takes place within the same day of trading, but Zubr also found that it can also occur over the course of longer periods of time.
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This means that in the short term, Bitcoin’s recent rally to the $12,000 level could see a decline similar to the $10,000 level, and a number of other factors point to the possibility of this decline.
What’s in it for traders?
Developing a better awareness of the market’s balance and its relationship to the Bitcoin price can be extremely insightful when incorporated into a daily trading strategy, especially since the volatility phenomenon discussed above has been constant since 2017.
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Traders can manage volatility and make profits by trading short and long term at Bitcoin daily. However, this is just one of the many things they should keep in mind.
According to Zubr:
„What the data does indicate is that lower risk opportunities are possible if one relies on historical events and considers that change to be intrinsic to Bitcoin’s trading character. For example, if Bitcoin Lifestyle rises by 10% and falls back to its opening price, the history indicates that there is an overwhelming possibility (more than 50%) that the price will fall by 9-12% on the same day or the next day.
While not conclusive in themselves, this data can be used when devising a strategy for intraday and impulse trading styles.
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In the meantime, only time will tell if Bitcoin will maintain its current market balance or continue above the $12,000 mark.