January was a rollercoaster ride for Bitcoin, with BTC surging 46% to a new high of $ 41,989 before falling 32% to below $ 29,000. This resulted in an increase in annual volatility to over 100% – last seen 10 months ago during the infamous ‘Black Thursday’ price drop.
In early March 2020, the price of Bitcoin fell more than 40% from $ 9,000 to $ 5,200 in a matter of days, resulting in a volatility of 60% to more than 150%.
Despite soaring volatility, Bitcoin recorded the smallest volatility spike of the top five crypto assets by market cap (excluding Tether).
Polkadot (DOT) ended the month with the highest volatility at 228%, followed by Cardano (ADA) with 183% and Ethereum (ETH) by 160%. Unlike Bitcoin, ETH, DOT and ADA dodged heavy corrections in January and ended the month near their respective local highs.
Looking ahead, Kraken expects Bitcoin’s price to rise upward in February with reduced volatility:
“Given that February is on average six percentage points more than May. And is 15 percentage points less volatile, you might expect February to outperform January and to decrease volatility as BTC melts.”
However, not everyone is convinced that Bitcoin will continue its way to higher peaks. The famous gold bug and infamous Bitcoin skeptic Peter Schiff speculated that BTC’s bullish momentum is unlikely to last, predicting it will be replaced by the rising meme coin DOGE:
Being the first mover to give Bitcoin an edge, it doesn’t guarantee it will win the race. #Bitcoin = Myspace, #Dogecoin = Facebook, _______ = Instagram, ______ = ______. Nothing will ever be the same #gold!
– Peter Schiff (@PeterSchiff) February 7, 2021