Volatility will always be the same, until the capitalization of the whole crypto will be significantly increased. And yes, it makes it difficult to use it on a daily basis. I think that in the future this will change, but I can not imagine how much time is needed for this.
In absolute terms, the higher the price, the higher the volatility. But this is a wrong argument, since the volatility parameter is relative. How can volatility be related to capitalization?
Peoples panics. See the situation on the cryptocurrency market now. Bitcoin is 3632$