Bitcoin Volatility Hits Record Low, Risks Correction

Bitcoin (BTC) has been in a long-standing rivalry with gold, with one BTC currently valued higher than an ounce of gold. However, Bloomberg Intelligence senior analyst Mike McGlone has issued a warning that Bitcoin is approaching a risky turning point. McGlone noted that Bitcoin's volatility has reached an all-time low, which, while indicating a potential for a major breakout, also carries significant risks.

McGlone highlighted that the historically low volatility of Bitcoin compared to gold and the S&P 500 could suggest a major breakout potential for BTC. However, he also cautioned that this situation poses great risks for Bitcoin, with the correction trend being more significant. He stated that Bitcoin is at a key test in terms of further earnings potential, and the annual volatility of BTC against gold reaching a record low at the beginning of June showed that the market was maturing.

McGlone's analysis suggests that Bitcoin’s maturation could reduce its chances for major upsides. The current low volatility in the bull market could also increase systemic risks for the increasingly politicized BTC. He noted that Bitcoin's 60-day volatility has hit a record low compared to gold and the S&P 500, which could signal an impending correction for Bitcoin, given the balance between Bitcoin and traditional assets.

McGlone further explained that periods of low volatility have often occurred in an environment of extreme pessimism. However, with market optimism prevailing this time, systemic risk may become more pronounced. He warned that a correction trend may emerge for Bitcoin against gold, given the recovery in the balance between assets.