Bitcoin (BTC) has historically been known for its volatile price movements, with past bull runs often interrupted by sudden and severe pullbacks that would be deemed bear markets in traditional finance.

Yet, the current Bitcoin rally, which started in early 2023, is standing out for its comparatively low volatility and reduced drawdowns, signaling a maturing market.

Volatility Data Highlights Greater Stability

According to Glassnode, Bitcoin’s realized volatility — a backward-looking measure of price fluctuation — has averaged below 50% on a three-month rolling basis throughout this bull run. This is notably lower than the 80% to 100% volatility range seen in previous cycles.

Additionally, Volmex’s BVIV index, which tracks implied volatility (market expectations of future price swings), has shown a steady decline recently, suggesting calmer market conditions ahead.

This increased stability is partly due to Bitcoin’s growing market capitalization, now surpassing $2 trillion and ranking as the world’s seventh-largest asset. As Bitcoin’s market size expands, it naturally requires larger capital flows to shift prices significantly, thereby dampening volatility.

Glassnode also pointed to the role of institutional investors, facilitated by the arrival of U.S. spot Bitcoin ETFs and improved regulatory clarity, which have brought a more sophisticated investor base into the market.

A More Controlled Price Advance

Examining Bitcoin’s price action from the 2020-21 bull market — which soared from $4,000 to nearly $70,000 — reveals frequent steep drops, often exceeding 30%. Conversely, the rally since March 2023, moving from around $30,000 to over $100,000, has taken a more measured “stair-step” approach, with price surges followed by periods of steady accumulation.

Glassnode explained, “Drawdowns in this cycle are generally less severe, mostly staying under 25%, with only a couple exceeding 30%.”

The shift toward a steadier uptrend can be attributed to less speculative frenzy and tighter controls on leverage. During prior bull markets, exchanges like Binance offered up to 100x leverage, which amplified both gains and losses, leading to frequent forced liquidations and abrupt price corrections.

Today, with leverage caps reduced and greater participation from long-term investors, Bitcoin’s current bull market demonstrates enhanced resilience.