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Kraken Intelligence, our team of in-house research experts, has released our Bitcoin Volatility Report for February 2020.

Key Takeaways

In February, bitcoin soared to a 1-month high of $10,516 and hit levels last seen in October 2019. However, despite rallying as much as +12% in Feb. and +46.5% YTD, a correction in the second half of the month sent bitcoin slumping -19% from its high.

Even with price falling into the month-end, bitcoin’s network usage grew and closed the month down -9%, driving bitcoin’s annualized velocity up +10% to 13.3x.

Bitcoin was notably more strongly positively correlated with traditional risk assets and more negatively correlated with traditional safe-havens in February; bitcoin’s 1-month correlation with the S&P500 went from 0.28 to 0.83 and from 0.70 to -0.37 with respect to gold.

While March tends to underperform February and is usually less volatile, March has historically outperformed February when February has closed out the month in the red.

Bitcoin is approaching the final innings of a multi-month and multi-year long pennant pattern formation, which suggests that a surge in volatility and trading volume could follow in the month(s) ahead as bitcoin enters into a new multi-month or, multi-year trend.

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