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.
Lowest volatility
The crypto and Bitcoin market has continued to stagnate for several weeks now. Following the trajectory of traditional markets, it has been holding 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 20-day rolling volatility is now lower than that of the Nasdaq and S&P 500 for the first time since 2018!
The volatility of BTC and Ether against the Nasdaq and S&P 500
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 is betting on the upside."
Currencies in trouble
If Bitcoin is experiencing a phase of low volatility, this is not the case for currencies. For example, the volatility of the Yen has 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 Pound Sterling has just experienced the largest increase in volatility in its history. The UK government led numerous fiscal stimulus initiatives which resulted in the 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 relatively good shape of Bitcoin. Indeed, while most currencies and equities fell sharply in the third quarter of 2022, Bitcoin performed better than 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 start of the week. However, this lull could be short-lived. The results of several giants like Google or Visa are expected this week and could cause the market to plunge again.
In addition, the FED meets on November 1 and 2. It will announce the consequences of its monetary policy. Many observers are betting on a further rise in interest rates, but it remains to be seen how much percentage this will be. The situation, therefore, remains precarious as long as macroeconomic conditions do not improve.
For the time being, although energy and freight prices are falling, there is no sign of a tangible improvement in the situation in the short term.
What next for Bitcoin?
Bitcoin has been trading in a range between $18,500 and $21,500 for 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, an established trader, identifies the $19,500 level 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 is trading at $19,730 at the time of writing, up 2.3% over the past 24 hours.
For their part, long-term investors continue to hodl. These currently represent 75% of BTC in circulation, the highest percentage since October 2015. Some may be based on Finder predictions which give Bitcoin an increase of 1320% by 2030. More than optimistic forecasts could cheer up the most pessimistic.
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