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Risk & Money

Volatility

Volatility is how much and how fast a price moves; crypto is far more volatile than stocks or currencies.

Volatility is usually measured as the spread of daily returns or by the average size of a candle's range, as in the ATR indicator. A coin that routinely moves 5% in a day is more volatile than one that moves 1%, and needs a wider stop and a smaller position for the same risk.

High volatility is why leverage is dangerous in crypto and why drawdowns are deep. It also changes how indicators behave: an RSI reading that is rare in a calm market can be common in a volatile one.

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