Market Wrap: Bitcoin Rebounds Amid Lower Volatility, Altcoins Outperform

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Don't miss CoinDesk's Consensus 2022, the must-attend crypto & blockchain festival experience of the year in Austin, TX this June 9-12.

Bitcoin (BTC) returned to above $45,000 on Friday as volatility faded.

Alternative cryptocurrencies (altcoins) were also higher, especially AAVE, which posted a 20% gain over the past 24 hours (up 60% over the past week) because of the platform's version 3 (v3) upgrade earlier this month. Ether (ETH) was up 4% over the past 24 hours, compared with a 9% rise in Solana's SOL token and a 1% rise in BTC over the same period.

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Meanwhile, stocks traded lower for most of the New York trading day as investors positioned themselves for aggressive monetary policy tightening because of strong U.S. employment data. Low interest rates and central bank stimulus contributed to rising asset prices. When inflation rises and the economy overheats, however, central banks reverse accommodative policies, which typically leads to higher market volatility.

In the bitcoin futures market, an uptick in short liquidations occurred over the past 24 hours because of the cryptocurrency's price jump. Liquidations happen when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin.

Still, the ratio of buy/sell volume was slightly negative on Friday, indicating low conviction among crypto traders despite BTC's price rise

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Volume spike coming?

Bitcoin's trading volume across major exchanges remains relatively low, according to CoinDesk data, despite trading activity tending to increase around the first and last weeks of the month.

The chart below shows large volume spikes, which typically occur during price drops. Some analysts noticed that BTC tends to decline around the beginning of the month before a recovery unfolds, similar to what occurred in February and March.

Bitcoin's trading volume by exchange (CoinDesk, CryptoCompare)

Bitcoin's trading volume by exchange (CoinDesk, CryptoCompare)

Neutral sentiment

The chart below shows a decline in the bitcoin put/call ratio, which suggests less bearish sentiment among option traders. The ratio has stabilized over the past two weeks, which could precede higher volatility, especially if BTC breaks above or below its short-term trading range.

The options market is placing a 55% probability that BTC will trade above $44,000 in May, according to data provided by Skew. And calls outweigh puts at strike prices above $45,000.

Bitcoin (BTC) returned to above $45,000 on Friday as volatility faded.

Alternative cryptocurrencies (altcoins) were also higher, especially AAVE, which posted a 20% gain over the past 24 hours (up 60% over the past week) because of the platform's version 3 (v3) upgrade earlier this month. Ether (ETH) was up 4% over the past 24 hours, compared with a 9% rise in Solana's SOL token and a 1% rise in BTC over the same period.

Sign up for Market Wrap, our daily newsletter explaining what happened today in crypto markets – and why. Coming April 4.

Meanwhile, stocks traded lower for most of the New York trading day as investors positioned themselves for aggressive monetary policy tightening because of strong U.S. employment data. Low interest rates and central bank stimulus contributed to rising asset prices. When inflation rises and the economy overheats, however, central banks reverse accommodative policies, which typically leads to higher market volatility.

In the bitcoin futures market, an uptick in short liquidations occurred over the past 24 hours because of the cryptocurrency's price jump. Liquidations happen when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin.

Still, the ratio of buy/sell volume was slightly negative on Friday, indicating low conviction among crypto traders despite BTC's price rise.

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Volume spike coming?

Bitcoin's trading volume across major exchanges remains relatively low, according to CoinDesk data, despite trading activity tending to increase around the first and last weeks of the month.

The chart below shows large volume spikes, which typically occur during price drops. Some analysts noticed that BTC tends to decline around the beginning of the month before a recovery unfolds, similar to what occurred in February and March.

Bitcoin's trading volume by exchange (CoinDesk, CryptoCompare)

Bitcoin's trading volume by exchange (CoinDesk, CryptoCompare)

Neutral sentiment

The chart below shows a decline in the bitcoin put/call ratio, which suggests less bearish sentiment among option traders. The ratio has stabilized over the past two weeks, which could precede higher volatility, especially if BTC breaks above or below its short-term trading range.

The options market is placing a 55% probability that BTC will trade above $44,000 in May, according to data provided by Skew. And calls outweigh puts at strike prices above $45,000.


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