What to know:

Bitcoin has long been criticized for its high volatility, with bull runs marked by sudden, sharp pullbacks that would qualify as full-blown bear trends in stocks.

However, the latest bull market, which kicked off in early 2023, feels different in a positive way, exhibiting relatively low volatility and drawdowns.

00:19Top 10 Crypto Exchanges RankedThe video player is currently playing an ad. You can skip the ad in 5 sec with a mouse or keyboardSTORY CONTINUES BELOWDon't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today.See all newslettersSign me upBy signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy.

Volatility in downtrend

According to data tracked by Glassnode, bitcoin's realized volatility on a three-month rolling basis has averaged less than 50% during this bull cycle, significantly lower than the 80% to 100% observed during previous bull runs.

The same thing can be said about the 30-day implied volatility, tracked by Volmex's BVIV index, which has been in a downtrend, according to data source TradingView. The implied volatility refers to the expected price turbulence over a specific period and is a forward-looking metric.

The stability likely stems from bitcoin's ever-growing market capitalization, which inadvertently fosters stability and increased institutional participation through ETFs and derivatives.

"Boasting a market capitalization of over $2T, Bitcoin now ranks as the 7th largest asset worldwide. As liquidity deepens, and the valuation of an asset reaches these heights, the capital required to meaningfully move the price of the asset becomes significantly larger," Glassnode said, explaining the volatility meltdown.

"Additionally, the launch of the US Spot ETF Products, supplemented by increasing regulatory clarity, has altered the underlying composition of the investor base, allowing sophisticated, institutional investors and capital to gain exposure to bitcoin for the first time," Glassnode added.

Stair-step rally

Pull up the price chart from 2020-21, and you'll see that bitcoin's then-bull run from $4,000 to $70,000 had several steep price pullbacks, sometimes more than 30%. In traditional markets, a drawdown of over 20% is typically considered a bear market.