For the first time since 2018, Bitcoin volatility falls below that of the Nasdaq and S&P500. A new sign of the widespread boredom that has been gaining the crypto market for several weeks.
The crypto and Bitcoin market has continued to stagnate for several weeks now. Following the trajectory of traditional markets, it remains above $18,000 for some time.
The most striking thing about this situation is the lack of volatility in a market that has been a feature of this market for many years. Indeed, Bitcoin’s rolling 20-day volatility is now lower than the Nasdaq and S&P 500 for the first time since 2018!
Some market watchers like TechDev continue to observe similarities between BTC and Nasdaq, he states:
BTC and Nasdaq monthly Bollinger Bands have never been closer.
This trader also expects a strong impulse soon on Bitcoin and bet on his side on the upside.
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Currencies in trouble
If Bitcoin is experiencing a phase of low volatility, this is not the case for currencies. For instance, Yen volatility more than doubled since March. This exceptional increase is notably due to the monetary easing implemented by the Bank of Japan.
For its part, the Livre Sterling just found out largest increase in volatility in its history. The UK government leading numerous fiscal stimulus initiatives which resulted in strong selling of UK assets. We also note a massive purchase of Bitcoin during the same period.
During this turbulent period, it is important to note the bitcoin’s relative good shape. Indeed, while most currencies and equities fell sharply in the third quarter of 2022, bitcoin performs better compared to these traditional markets.
The latter have nevertheless observed a rebound for several days. The S&P 500, for example, is up more than 5% since the beginning of the week. However, this lull could be short-lived. The results from several giants like Google or Visa are expected this week and could push the market back down.
Moreover, the FED meets on November 1 and 2. It will announce the consequences of its monetary policy. Many observers bet on a further rise in interest rates, it remains to be seen how many percentages the latter will be. The situation therefore remains precarious until macroeconomic conditions improve.
For the time being, if energy or freight prices are falling, no sign of tangible improvement of the short-term situation is in sight.
What next for Bitcoin?
Bitcoin is trading in a range between $18,500 and $21,500 since several weeks. This absence of volatility leads many observers to predict a sudden and large movement in the weeks to come. Michael Van De Poppe, a recognized trader, identifies the level of $19,500 as a crucial resistance. He declares :
If we break through this level on the upside, we can definitely say that once we break $19,500 and consolidate here, we will definitely have a short squeeze happening around $20,700 or $22,400. It’s a way to hunt all stops above these highs.
Bitcoin trades at $19,730 at the time of writing these lines 2.3% increase over the last 24 hours.
For their part, long-term investors continue to hodl. These currently represent 75% of the BTCs in circulation, the highest percentage since October 2015. Some may be based on the Finder predictions which give a Bitcoin up 1320% by 2030. More forecasts only optimists that could lift the spirits of the most pessimistic.
For more on Apple’s war on NFTs, find our article here.