The recent market movements have kept investors on toes, with Bitcoin finally settling back above $29,200 after a tumultuous day. Interestingly, major altcoins like BCH and UNI, found themselves in negative terrain, both dipping over 5% and 6%, respectively. The roller coaster ride seemed to subside and BTC retreated back to its usual narrow $500 range – a familiar terrain since mid-July.
It was interesting to notice how investors sidelined industry-specific and macro events that usually trigger price hikes. As an example, BTC had rocketed past $30,000 on reports of a U.S. Treasury downgrade by Fitch and MicroStrategy’s further plans to buy more bitcoin. However, it immediately plunged below $29,000 after allegations surfaced that Binance could be looking at Federal criminal charges.
Jeff Feng, co-founder of Sei Labs, drew attention towards the recent kaleidoscope of news, particularly multiple applications for spot Bitcoin and Ether ETFs. Feng wrote about these contributing to the volatility of the crypto market and possibly paving the way for bigger price shifts in future.
Ether, the crypto with the second-largest market value, was changing hands at $1,842, with other major cryptos wallowing in the red. Likewise, Litecoin (LTC) also took a 6% plunge, which was a twist considering its anticipated ‘halving’ event. The event was set to curb the issuance of new tokens by reducing miner rewards by half. Astonishingly, LTC has dropped a staggering 22% from its peak only a month back.
On the other hand, the CoinDesk Market Index (CMI), a measure of crypto markets’ performance, fell 0.5%. The CMI has been oscillating between positive and negative in the recent past. The Deribit Volatility Index (DVOL) for BTC and ETH trading have reached the bottom, according to Luuk Strijers, the chief commercial officer at crypto derivatives exchange. This infrequent occurrence, where Ether’s DVOL trades below Bitcoin’s DVOL, Strijers attributes to the activity of a single major player.
However, he also noted that the market anticipates a surge in volatility, primarily driven by critical upcoming events like the ruling on Blackrock’s spot ETF and the impending Bitcoin halving. Deribit has observed signs of this anticipation in the form of the significant steepness of the term structure.
To put it succinctly, the crypto markets recently have been nothing short of a roller coaster ride. While some events spur investor interest and push prices up, others lead to drops just as quickly – underscoring the dynamism of the crypto world.
Source: Coindesk
