Bitcoin volatility increased in the first week of October, and analysts predict that this situation will continue at least for the rest of this month.According to Monday's BitfinexAlpha report, "Since early October, the average volatility of Bitcoin has been greater than the volatility of the asset over the past 200 days in history
Bitcoin volatility increased in the first week of October, and analysts predict that this situation will continue at least for the rest of this month.
According to Monday's BitfinexAlpha report, "Since early October, the average volatility of Bitcoin has been greater than the volatility of the asset over the past 200 days in history.
The report highlights a historical trend where major stock indices first experience volatility before spreading to other risky assets such as Bitcoin. Analysts cited the volatility index of the S&P 500 index, stating that the index has rebounded from its multi-year low on September 15th.
The report adds: "The isolated high volatility events of Bitcoin and other cryptocurrency assets are continuing to rise, and this trend may continue as historical volatility remains above critical averages." The cited isolated high volatility event occurred on October 2nd, when historical 24-hour volatility increased by over 340%.
The report adds that the Bitcoin options market shows that the implied volatility in October is still higher than historical volatility, which is in sync with a similar upward trend in volatility in the US stock market.
Bitfinex analysts added, "As in the past, the options market is currently pricing against the volatility of the Bitcoin. The implied volatility is currently 37.8%, while the historical volatility is 32.4%
Thursday US Consumer Price Index (CPI) data
Luke Nolan, a research assistant at CoinShares Ethereum, emphasized another factor that may drive volatility in the cryptocurrency market. This week's US inflation data is a turning point in the volatility of Bitcoin and the broader cryptocurrency market.
Nolan stated that Thursday's consumer price index may be lower than expected, with a consensus forecast of 3.7%, lower than the previous forecast of 3.8%.
Nolan added in a CoinSharesCrypto update on Monday, "This is likely to bring volatility to the market and have an impact on digital assets
However, after Hamas attacked southern Israel over the weekend, oil prices rose and traders increased the geopolitical risk premium for commodities. The two major crude oil benchmarks rose nearly 4% in early trading on Monday.
The rise in oil prices may become an obstacle to the Federal Reserve's 2% inflation target.
Due to the dynamics between short-term and long-term holders, the price of Bitcoin remains at a support level above the $27000 mark. Bitfinex analysts say that since April 13th, the supply of BTC short-term holders has decreased by nearly 1 million units, while the supply of long-term holders has increased by over 1 million units during the same period.
According to CoinGecko's data, as of 1:30 pm Eastern Time, the world's largest digital asset by market value changed hands at $27450, falling 1.6% in the past 24 hours.
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