What is Volatility?
Volatility refers to the degree of price fluctuation in a financial asset over time. Higher volatility means larger and more frequent price swings, while lower volatility indicates more stable price movements.

Types of Volatility:
Historical Volatility (HV) – Measures past price fluctuations over a set period.

Implied Volatility (IV) – Reflects expected future volatility based on options pricing.

Realized Volatility (RV) – The actual volatility observed in a specific time frame.

How Volatility Affects Crypto
High Volatility → More risk and higher potential for profit/loss. Often seen in news events, major market moves, or liquidations.

Low Volatility → Price moves within a tight range, often before a breakout.

How to Measure Volatility in Crypto
Bollinger Bands – Wider bands indicate higher volatility.

Average True Range (ATR) – A higher ATR means more volatility.

Volatility Index (VIX for traditional markets) – No direct crypto equivalent, but BTC options data can indicate expected volatility.
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