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Bitcoin Volatility Analysis

The volatility of Bitcoin is an indicator of the price fluctuations in a specific asset. Its volatility is measured in terms of how far prices change from the average. This change is usually measured in percentages, as changes in value are comparable between different assets over time. Bitcoin prices have not experienced as much volatility as in 2011, when the price reached an all-time high of almost $18,000. Therefore, Bitcoin volatility analysis is a good tool to help investors understand fluctuations in the price of a Bitcoin.

The most commonly used parameter for volatility is the number of buy / sell orders per unit of Bitcoin. This parameter reflects the average volatility over a certain period. For instance, if a stock goes up on average, it shows a positive correlation. However, a negative correlation between volatility and price may indicate a risky investment. A negative correlation between the volatility of a stock and its price may indicate a volatile asset.

As Bitcoin has the highest share of the cryptocurrency market, it has also become the most popular currency in the world. Its market cap is currently around 70 billion USD. The majority of Bitcoin research has focused on the price of Bitcoin in standard currencies, not on a currency index. It has experienced exponential growth from six USD to over 4,000 USD per BTC today. It uses multi-scale analysis, which includes tick data on a 5 minute scale, through a 1 hour scale, and finally, through the entire day.

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