The cryptocurrency exchange also named the reason for the rise in the price of bitcoin above $ 12,000 earlier in August.
Bitcoin is back on the trail of increased volatility. This is the conclusion reached by the Kraken cryptocurrency exchange.
According to the published analytical report on bitcoin activity for August 2020, the explosive increase in volatility was preceded by a 15-30% spike in price changes every year.
So, for example, in 2019 the smallest jump in volatility was 23%, and the maximum reached 106%.
“Given that so far the maximum volatility of bitcoin has been only + 25% and has not yet approached the 315-day moving average, we should expect an increase in volatility,” the report says.
The upcoming change in price activity, according to Kraken, is signaled by the historic maximum of American securities, the minimum of Bitcoin dominance on a multi-year scale, as well as a record number of bitcoins untouched for more than a year.
Kraken also believes that overcoming the level of $ 12,000 earlier in August 2020 was due to the purchase of more than $ 250 million of bitcoins by the largest analytical company MicroStrategy.
Only old men go to battle
In addition to the increase in the number of large Bitcoin holders, the price of the cryptocurrency was influenced by the announcement of the Berkshire Hathaway company to buy a controlling stake in the gold mining company Barrick Gold.
The news caused a special stir due to the fact that previously the owner of Berkshire Hathaway Warren Buffett in every possible way avoided investing in the gold market.
Since the beginning of 2020, altcoins have been gradually taking away market share from bitcoin. Bitcoin’s dominance collapsed even more with the explosion in popularity of the decentralized finance (DeFi) market.
However, Kraken sees nothing wrong with Bitcoin losing the market. According to the analysts of the exchange, the enrichment with altcoins will ultimately lead to the reverse circulation of bitcoin.
Kraken also believes that the overbought securities market, which may fall in price in the coming months, could affect both Bitcoin and the entire cryptocurrency market as a whole.
For better or for worse, time will tell.