Bitfinex Alpha | BTC tumultuous but volatility easing

Bitfinex Alpha | BTC has been turbulent but volatility has eased

The Bitcoin market appears to be looking for price equilibrium as traders adapt to the new rate of BTC supply to the market from mining and absorb increasingly complex messages about inflation and interest rates from macroeconomic indicators. It continues to be seen.

BTC made a sharp correction last week after hitting a new local low, and market sentiment has fluctuated in the last week even as major altcoins remain stable above their April lows.

An important development is the activity observed among Bitcoin whales, as indicated by the exchange whale ratio, where investors in this group are seen attempting to sell their Bitcoin onto exchanges. This suggests that there may be some selling pressure. That said, historically, most of the aggressive selling has been from more price-sensitive short-term holders, i.e. those who have held BTC for 155 days or less. The realized price for this group is $58,700, which appears to be acting as an important support level in the current market. Judging by the ratio of short-term holders’ market capitalization to realized value, selling appears to be waning.

Further support can be seen from the fact that this post-halving period resulted in a noticeable drop in volatility. The significant drop in Bitcoin’s implied volatility suggests that the market is calming down and expectations for sharp price movements are decreasing. Volatility risk premiums for both Bitcoin and Ethereum have narrowed dramatically, indicating a recalibration of market expectations towards a more stable and predictable environment.

This is because, given the current economic climate, the Fed continues its prudent and prudent approach, keeping interest rates between 5.25% and 5.50% and currently slowing the pace of asset reductions on its balance sheet. This means that demand for government bonds is increasing.

Inflation remains stubbornly strong, with the latest data on the employment cost index rising faster than expected as a tight labor market could lead to employees demanding inflationary wage increases. However, the number of job openings has not increased accordingly, causing a decline in consumer confidence in the labor market.

In fact, this was backed up by a Bureau of Labor Statistics report showing job openings falling to their lowest level in three years and wages slowing.

In last week’s crypto news, Binance founder Qiao Changpeng was sentenced to four months for money laundering and sanctions violations. And Hong Kong witnessed the debut of a new Spot Bitcoin ETF, marking a major step forward in the adoption of crypto assets in the region, even if initial uptake was slow.

And finally, Tether, the world’s largest stablecoin issuer, reported record profits of $4.52 billion in the first quarter of 2024 and has a net worth of $11.3 billion, reflecting its strong financial position. revealed that it was $70 million.

Have a great trading week!

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