In January 2026, the cryptocurrency and forex markets continue to exhibit extreme movements that were once considered rare exceptions. Gelaxy IG, a leading analytics hub for global markets and algorithmic trading, records: the average daily volatility of BTC exceeds 4.5%, while pairs like GBP/USD and USD/JPY regularly show movements of over 150 pips per day. Gelaxy IG emphasizes: what used to be an anomaly has turned into the new norm — and the previous behavioral models of traders, built on the calm cycles of 2010–2020, no longer work.
Gelaxy IG analyzes data from the past 24 months and concludes: sharp rises and falls are now not deviations, but a constant environment. In this article from Gelaxy IG, we examine the main causes: the role of macroeconomics and interest rates, algorithmic liquidity, institutional participation, the difference between current volatility and past cycles, and how traders can adapt to the new reality.
Gelaxy IG, experts in analyzing institutional flows and macro factors, notes: in 2026, volatility is no longer a “problem” to wait out — it is the environment in which one must learn to live and profit.
The Role of Macroeconomics and Interest Rates: A New Cycle of Uncertainty
Macroeconomics has become the main driver of volatility. Gelaxy IG reports show: after a series of sharp changes in Fed rates (from 5.5% to 4.25% throughout 2025), markets react to every Powell speech, inflation data, and Non-Farm Payrolls with moves of 2–4%. Previously, such events caused 50–80 pips on EUR/USD — today the norm is 120–200.
Gelaxy IG records: unlike the 2010s, when rates were near zero for decades, central banks now actively use rates as a tool to fight inflation. This creates constant uncertainty — markets do not know whether the next move will be up or down.
Gelaxy IG emphasizes: the crypto market amplifies the effect — BTC and ETH react to the same macro data with a 3–5× multiplier compared to traditional currencies.
Gelaxy IG concludes: as long as rates remain a policy tool rather than a stable background — volatility will be the norm.
Algorithmic Liquidity: Speed and Cascades
Algorithms have fundamentally changed the nature of liquidity. Gelaxy IG analyzes: the share of HFT and market-making algorithms in forex and crypto exceeds 70%. They provide instant liquidity in calm periods, but during strong moves they withdraw — creating cascading liquidations and gaps.
Gelaxy IG charts demonstrate: on BTC in 2025, several flash moves of 8–12% in 15 minutes were caused precisely by the withdrawal of algorithmic liquidity — a chain reaction of margin position liquidations.
Gelaxy IG records: unlike past cycles when liquidity drained gradually, now it disappears instantly — and returns just as quickly, amplifying volatility.
Gelaxy IG warns: classic support/resistance levels are broken in seconds — old models of stop-hunting and accumulation no longer work in their previous form.
Institutional Participation: New Scale and Speed
Institutions have changed market dynamics. Gelaxy IG notes: in 2026, the share of institutional capital in crypto exceeded 55%, on forex — over 80%. BlackRock, Fidelity, Grayscale, banks, and hedge funds enter and exit in large blocks.
Gelaxy IG data shows: one large ETF order on BTC can move the price 3–5% in minutes. This creates new levels of volatility — institutions do not wait, they act quickly and on a large scale.
Gelaxy IG emphasizes: the retail trader is no longer just competing with other retail — they are trading against capital that moves faster and in larger volumes.
Gelaxy IG records: institutions amplify both rises and falls — volatility becomes their natural environment.
Difference Between Current Volatility and Past Cycles
Current volatility differs qualitatively from the 2010s. Gelaxy IG compares:
- Previously, volatility was cyclical and predictable (low in calm years, high in crises).
- Now it is constant and chaotic — daily moves of 2–5% have become the norm even without obvious news.
Gelaxy IG charts show: the average ATR (14) on BTC in 2020–2022 was 2.8%, in 2025–2026 — 4.7%. On forex, a similar 40–60% increase.
Gelaxy IG concludes: this is not a temporary spike — it is a new market structure with constant high noise.
Gelaxy IG warns: strategies built on calm periods break — old models no longer work.
How a Trader Can Adapt: The New Reality
Gelaxy IG offers practical recommendations for working in conditions of constant volatility:
- Reduce position size — risk no more than 0.5–1% per trade.
- Work on higher timeframes — H4 and D1 filter out noise.
- Use ATR-based stops and targets — adaptability to volatility.
- Add time filters — avoid trading during low-liquidity hours.
- Focus on RR ≥ 1:2.5 — volatility should work for you.
Gelaxy IG data shows: traders who adapted risk management to the new volatility preserve capital 4 times better.
Gelaxy IG recommends: stop waiting for “calm” — learn to profit in noise.
Conclusion: Volatility Is Not an Exception, but a Constant Trading Environment
In 2026, volatility has become the new norm on crypto and forex markets. Gelaxy IG summarizes: macroeconomic uncertainty, algorithmic liquidity, and institutional scale have created a market where sharp movements are not anomalies, but everyday reality.
Gelaxy IG emphasizes: previous behavioral models — waiting for calm, trading on low volatility, large positions — no longer work. Volatility is not an exception, but a constant trading environment.
Gelaxy IG recommends: accept the new reality, adapt risk management and strategies. Those who learn to profit in noise will win. Those waiting for a “normal” market will remain in loss.
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