In March 2025, altcoins such as Cardano (ADA), Solana (SOL), and XRP have witnessed a strong increase in their realized volatility, with ADA reaching a record high of 150%, while SOL and XRP both exceeded 100%.
At the same time, Bitcoin (BTC) also recorded significant volatility, although the level remained relatively mild, reaching only 50%, much lower than its historical highs.
Realized volatility reflects the price changes over a certain period. The strong increase in the volatility of ADA, SOL, and XRP indicates that their values are fluctuating more widely, while Bitcoin's volatility has maintained relatively stability.
Compared to Bitcoin, altcoins are often more susceptible to speculative trading activities, primarily driven by factors such as news, rumors, and community momentum. This can lead to excessive price fluctuations.
XRP is particularly sensitive to regulatory information, especially the ongoing lawsuit with the SEC, which has contributed to its increased price volatility.
In a bullish market environment, investors often shift Capital from Bitcoin to altcoins in search of higher returns, further increasing the volatility of altcoins. While this volatility presents greater profit opportunities, it also carries the risk of significant losses.
Ethereum is a typical example of this trend. Despite losing the $2,000 support level for the first time since 2023 and an increase in exchange reserves, the Estimated Leverage Ratio (ELR) of ETH has surged, indicating a high level of risk in the Derivative market.
In other words, traders are actively leveraging positions on both sides, amplifying the volatility - creating a "high risk, high reward" structure that can drive dramatic price changes.
The divergence of these altcoins is also clearly reflected in their price movements, as ADA, SOL, and XRP have broken through key support levels and struggled to consolidate.
The increase in volatility is turning altcoin trading into a highly speculative activity with elevated risk levels.
However, is Bitcoin positioning itself as a more stable asset in the face of growing instability?
Historically, Bitcoin has experienced spikes in volatility, at times exceeding 100%. However, the March 2025 data shows stability in its price structure.
While Bitcoin provides a safer haven with lower volatility, it also limits short-term profit potential. This contrasts with altcoins, where high risk corresponds to higher profit opportunities.
Could this reinforce Bitcoin's position as a long-term store of value? Current volatility trends may suggest this is feasible.
Meanwhile, the Age Consumed metric, which tracks changes in long-term investors, did not record a sudden increase despite Bitcoin dropping below $80,000 and losing billions in market value.
This suggests that veteran investors remain steadfast in their long-term confidence in Bitcoin's prospects.
Overall, the shifting volatility trends are shaping trading strategies. Altcoins, with their high risk-high reward potential, may dominate short-term speculative trades. Meanwhile, Bitcoin continues to assert itself as a preferred long-term store of value.
Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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