Market Wrap: Expected Increased Volatility in Ethereum and Bitcoin

Ethereum and Bitcoin

We cannot rule out the possibilities of a sharp price move over the next few days.

On Wednesday, cryptocurrency prices were mainly lower, with bitcoin trading in a narrow range of about $56,000. Technical indicators imply that the downside is confined near the $53,000 support level, which might keep buyers active as the market approaches the $60,000 resistance level.

Trading activity is projected to go low during the following three days, notably on Thanksgiving Day in the United States on Thursday. Nonetheless, as November draws to a close, some analysts predict the Bitcoin and Ethereum options market to become more volatile.

Rising volatility could result in strong price movements over the next few days, discouraging buyers from holding positions for long periods.

Market Wrap will resume on Monday, November 29 after the Thanksgiving break in the United States.

Prices at the moment

  • Bitcoin (BTC): $57,420, down 0.65%.
  • Ether (ETH) is currently trading at $4,271, down 2.51 percent.
  • S&P 500: $4,701, +0.23%
  • Gold is currently trading at $1,788, down 0.12%.
  • The yield on a ten-year Treasury note ended the day at 1.63 percent.

“In the short term, the market will remain range-bound.”  Pankaj Balani, CEO of Delta Exchange, a crypto derivatives trading platform, stated, “BTC has failed above $60K a few times, and it will take some doing to break through that level.”

“All risky assets, and Bitcoin, can expect downward pressure and more volatility,” Balani wrote, “but the $1 trillion market capitalization level (now approximately $53K BTC) should stand as a decent support for bitcoin very shortly.”

Be ready for higher volatility

Some analysts predict that Bitcoin and Ethereum options will become more volatile in the coming days, implying that price swings will be more announced.

Bitcoin’s daily implied volatility has been declining since May, and it could be on the verge of rising from its current lows. Due to leveraged perpetual futures trading, bitcoin can express large price volatility in both directions, unlike traditional stock markets, where price volatility often occurs to the downside,” crypto-asset manager Two Prime noted in research earlier this week.

Furthermore, “with bitcoin leverage ratios still very high,” Two Prime stated, “additional price falls might kick off a cascade of liquidations, resulting in bitcoin rapidly testing its 100-day moving average (now around $53K BTC).”

Ether’s volatility has been trending lower, however with larger swings, like bitcoin’s. This is most likely owing to ETH’s higher speculative interest in the options market than BTC’s.

“When implied volatility (options market predictions of future volatility) is much higher than realized volatility (the actual price fluctuation during prior trading ranges), an increase in the latter is likely around the corner,” Two Prime said.

Altcoin roundup

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The Author

Samuel Adeshina

Samuel is a financial reporter whose interests include blockchain, market, business, insurance, and Crypto to provide relevant information to all interested.