A New Normal For Bitcoin? Volatility Likely To Decline Until This Changes
The price of Bitcoin has been moving sideways and shows no signs of breaking out of its current range. Despite some profits over the past week, Bitcoin remains trapped between $28,000 and $30,500. Analyst Dylan LeClair suggests that the dominance of derivatives trading has suppressed the spot market and led to a decline in Bitcoin’s volatility. With low uncertainty in the short term and the U.S. Federal Reserve out of session, Bitcoin is expected to continue chopping around its current levels. Derivatives traders are selling volatility through various financial instruments, and there has been an increase in call contracts on the options market. However, traders are becoming hesitant to sell their contracts at historically low implied volatility levels. The market is eagerly awaiting the approval of a Bitcoin spot Exchange Traded Fund (ETF) in Q4, 2023, which could be a catalyst for Bitcoin’s price movement. Overall, Bitcoin seems to be ahead of any bullish narratives and is likely to outperform other cryptocurrencies in the sector for the rest of 2023.
Key Points:
– Bitcoin’s price remains trapped between $28,000 and $30,500, showing no significant movement.
– Derivatives trading has dominated the market and suppressed Bitcoin’s volatility.
– Traders are selling volatility through financial instruments, but are becoming hesitant to sell at historically low implied volatility levels.
– The market is waiting for the approval of a Bitcoin spot ETF in Q4, 2023, which could be a catalyst for price movement.
– Bitcoin is expected to outperform other cryptocurrencies in the sector for the remainder of 2023.
Hot Take:
Despite the current lack of volatility, Bitcoin seems to be in a strong position for the rest of 2023. With the market eagerly awaiting the approval of a Bitcoin spot ETF, there is potential for significant price movement. Traders may be hesitant to sell their contracts at low implied volatility levels, further suppressing Bitcoin’s price. However, if a catalyst emerges, Bitcoin has the potential to surpass $30,000 and even reach $40,000 by the end of the year.
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