According to data from TradingView and Glassnode, Bitcoin's volatility is approaching a peak for this cycle due to heightened panic surrounding an imminent trade war and the U.S. plan to stockpile cryptocurrencies.
Data shows that since President Trump took office in January, conflicting bullish and bearish signals have reached a peak, making the price movements of cryptocurrencies dizzying.
Glassnode stated in a research report in March: "As the dramatic fluctuations in price movements indicate, the market conditions over the past two weeks have been very turbulent against a backdrop of political uncertainty."
Bitcoin's average realized volatility is nearing a cycle high. Source: Glassnode
According to Glassnode, Bitcoin's realized volatility (a measure of daily price changes) has "recorded some of the highest volatility values of this cycle so far, exceeding 80%" over one-week and two-week time frames.
Meanwhile, according to TradingView, as another measure of volatility, the average true range (ATR) of this digital currency has reached a cycle high of over 4900, up from about 3000 in late February.
As of March 5, Bitcoin's price has dropped nearly 30% from its all-time high of about $109,000 in December last year, which was the highest spot price for this cryptocurrency. Glassnode noted that altcoins ETH and SOL have both fallen over 50% from their respective peaks.
Comparison of Bitcoin's average true range with price. Source: TradingView
Tariff Turmoil
On March 4, President Trump imposed a 25% tariff on the U.S.'s two largest trading partners, Canada and Mexico.
For traders, this bearish news felt like a feint. Earlier, on March 2, Trump revealed plans to create a U.S. cryptocurrency reserve, with tokens including BTC, ETH, XRP, and ADA, which had made traders optimistic.
According to Google Finance, in response, Bitcoin fell to about $82,000 after reaching a high of about $93,000 on March 3. Altcoins like ETH and SOL saw even larger declines, with data showing they dropped approximately 12% and 20%, respectively.
This sell-off indicates that macro factors may overshadow positive developments within the industry, including the U.S. Securities and Exchange Commission's dismissal of several lawsuits against cryptocurrency companies in February.
On March 4, as spot prices fluctuated significantly, cryptocurrency derivatives traders suffered over $1 billion in liquidation losses.
Related: Trump's White House Cryptocurrency Summit, confirmed attendee lineup revealed.
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