For most of bitcoin's existence, what appears to be volatility is just the market trying to determine the price of a new asset. But even as it's become more widely adopted it seems that the biggest downward driver on price is bitcoin's liquidity.
It can be so instantly and easily turned into cash. 24x7. So anyone financially compromised turns to their most liquid asset: bitcoin.
When markets drop in property, stocks, forex or even altcoins - bitcoin drops. From FTX to Japan raising interest rates just a quarter of a percent. A lot of people turn their bitcoin into dollars and there's a dip.
Worse, because it's expected now, people sell to avoid the paper loss.
I'm interested to hear people's views on this trend and if, how and when the pattern might be broken.
And is particular, has it kept bitcoin's price lower than it otherwise would be, or are prices recoveries 'complete'?
You are right when you did said volatility is mainly the market trying to determine the price of a new asset but in the real sense its the determining of the new price of same asset and not just any new new asset, it does affect other asset sometimes but it doesn't mean its for the new asset but its mainly for bitcoin as an asset but other dependent assets do or are in a way affected by this movement and attempt to determination of price for bitcoin.
The point at which some people do sell of their bitcoin and have to turn it out to be dollars they can spend, this helps with liquidity with which bitcoin in the long run experiences the price change both up and down which later leads to the valuing of the asset accordingly.