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Welcome To November, The Month Of Volatility
November is generally a volatile month for bitcoin - but unlike "Uptober", it can move in either direction.
After a shaky start, Uptober came through in style, with a 29% price bump for BTC. Crypto tends to exhibit strong seasonality, and the more traders are watching the average performance for each month, the more it becomes a self-fulfilling prophesy.
For November, though, the pattern is not so much one of either up or down (as is the case for October, generally an "up" month), but more of volatility.
The Ghosts Of Novembers Past
Let's take a look at how previous Novembers have treated bitcoin. We'll use opening and closing monthly data from Bitstamp, since it has been up and running almost continuously since 2011.
- 2011: Bitcoin closed down slightly, losing 3.33% between the start and end of November. Hardly a volatile month—until you consider that the high was $15 and the low was $2.
- 2012: Just a 13% rise, hitting a high of $13, as BTC climbed back to challenge the peak of the previous November's bubble top.
- 2013: At +450% and topping out at $1,163, November 2013 was where BTC started to come to broader attention for the first time.
- 2014: +12%, once of the least volatile Novembers on record, as the bear market wore on.
- 2015. +21%, but a range of $294-502 as bitcoin put in a mini-bubble on the road to recovery.
- 2016. +6%, a very quiet month by November standards.
- 2017. +55%. A huge month, as BTC approached the top of another bubble.
- 2018. -37%. BTC breaks down following an 11-month bear market, dropping through support. From high to low, the price is almost cut in half.
- 2019. -17%, again in a correction following the mini-bubble that announced the end of the 2018 bear market.
- 2020. +43%, a storming performance as BTC was gearing up to put in an all-time high the next year.
- 2021. -11%. BTC peaks and starts its long slide over the course of the next year. While the monthly loss from open to close is relatively limited, there's a $16,000 swing between high and low.
- 2022. -16%. Bitcoin puts in its final capitulation to the bear market low of $15,500.
- 2023. 6% so far, but the month is young.
Lessons To Learn
These figures mask a wide range of circumstances. Some are part of a bubble peak, which typically occur in November or December. Others are for bear markets, which tend to bottom out in the same period.
For the bubble years 2013, 2017, and 2021, BTC put in +450%, +55%, and -11%, respectively.
For post-bubble (bear market) years, the results were +12% (2014), -37% (2018), and -16% (2022).
For the years following a bear market, where BTC is in a nascent bull market, bitcoin saw +21% (2015) and -17% (2019). 2023 is also the first full year of the new bull market.
Without accounting for whether the month closes up or down, average volatility for November is 56%, but there are two caveats to that. One is that there can a be lot of intra-month volatility, which is hidden by simply using the monthly open and close. The second is that the 2013 figure of 450% was a one-off that hugely skews the result. Without that outsized number, volatility averages 20%.
While we can't predict with confidence whether November will be end red or a green for bitcoin, it's looking highly likely that this month will follow the pattern of volatility.
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