Realized volatility measures the actual historical price fluctuations of a digital asset over a specific period. It quantifies how much the asset’s price has moved from its average value, providing an empirical assessment of past price instability. This metric is calculated using historical price data, typically daily or hourly returns. High realized volatility indicates significant past price swings, while low realized volatility suggests relative stability.
Context
The current level of realized volatility is a key consideration for risk management and trading strategies in digital asset markets. Discussions frequently compare realized volatility with implied volatility from options markets to assess whether market expectations align with historical movements. Future analysis will continue to leverage this metric to understand market risk and historical price behavior.
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