Volatility across Bitcoin and the wider crypto space has not only been subdued but is virtually non-existent. Today's Morning Note will examine how long this can last and what catalysts can bring it back up.
The information contained here is for general information only. It should not be taken as constituting financial advice. Stormrake is not a financial adviser. You should consider seeking independent financial advice prior to making any personal investments.
Bitcoin Volatility Index
Bitcoin volatility is reaching levels not seen since March 2022. The BVOL Token, a volatility token traded through FTX made a new all time low over the weekend's trading session. Considering the all time low in BitVol was deep in the bear market back in 2019 with a print of 42, we are probably due for a large spike in volatility.
The catalysts can come in many forms, a hotter than expected CPI print this Thursday evening would do it (a 75 bps + rate hike from the FED in early November). It could also be an unforeseen escalation of the Ukraine-Russia conflict. Any of these events can trigger a move towards the 80 handle on BitVol.
Can we stay in this holding pattern and even print fresh local lows in Bitcoin volatility? The answer is yes, nothing is a certainty in crypto but on a balance of probabilities, an explosive move is more likely than continued chop.
The catalysts can come in many forms, a hotter than expected CPI print this Thursday evening would do it (a 75 bps + rate hike from the FED in early November). It could also be an unforeseen escalation of the Ukraine-Russia conflict. Any of these events can trigger a move towards the 80 handle on BitVol.
Can we stay in this holding pattern and even print fresh local lows in Bitcoin volatility? The answer is yes, nothing is a certainty in crypto but on a balance of probabilities, an explosive move is more likely than continued chop.
PayPal shows insidious streak
Late Friday evening a policy change was announced by PayPal, where users might have been fined $2500 for spreading misinformation. PayPal later on during the weekend, backtracked on its decision, citing "clerical error". The fintech company said the policy update that went out to users was an 'error' and that the company apologised for creating any confusion.
There was rightful outrage that a neo-bank has given itself the authority to be the commander of what is "misinformation". This ultimately led to the policy backflip.
It's important to note that this issue is not just limited to PayPal, although they make it glaringly obvious, any bank or financial custodian provides conditioned access to your hard earned money. Bitcoin is the answer to having free and independent money. You can redeem, send and spend without having to adhere to an arbitrary policy set be some suits in a boardroom.
It's important to note that this issue is not just limited to PayPal, although they make it glaringly obvious, any bank or financial custodian provides conditioned access to your hard earned money. Bitcoin is the answer to having free and independent money. You can redeem, send and spend without having to adhere to an arbitrary policy set be some suits in a boardroom.
BTC/USD key levels
Bitcoin right back to the magnet level of $19,560. There is simply no meaningful price action to infer any short term directional bias. Safer to look for a breakout to the upside with a close above $20,554. To the downside, watch for a breakdown of $18,549. One thing is for certain, volatility is coming and when it comes we will be prepared.
ETH/USD key levels
Meanwhile in Ethereum land, volatility is also virtually non-existent and trading at its own magnet level of $1,333 USD. Nothing meaningful will happen to the upside until $1,400 has been broken and reclaimed. To the downside a similar situation is awaiting until a break and close below $1,241. We will remain rangebound until a catalyst, outlined earlier in the report, occurs and brings with it the required volatility to start trading.
No Advice Warning
The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.
Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.
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