good morning. Here’s what’s happening:
price: The recent monotony of Bitcoin and altcoin prices could be a stepping stone to more volatility ahead. Bitcoin, on the other hand, has been in a tight range recently above $29.1,000.
insight: The supply of bitcoin, which was active over a year ago, has dwindled. Is Hodling starting to wane?
Will volatility increase further in the future?
Is Bitcoin’s current stagnation just a preparation for more dramatic moves to come?
A K33 report earlier this week suggested something similar. The Digital Asset Analysis Group recently said that the largest cryptocurrency has seen increasingly tight spreads over the past six weeks, unaffected by the macroeconomic and industry events that likely pushed investors up and down over the past few years. It is trading, but noted that it is headed for more volatile times. Based on historical precedent.
When the Asian TradFi market opened on Friday, BTC hovered just below $29,200, flat over the past 24 hours and firmly in the $500s for the better part of the two weeks. And Bitcoin has failed to break above $31,000 since mid-July.
“Crypto deep sleep tends to be followed by a heavy awakening,” wrote K33 Senior Analyst Vetl Runde. “The market is clearly in an unprecedented stage of stabilization and will usually act as a huge pressure valve against volatility when it finally flares up.”
“My short-term theory is that market volatility pressures are about to reach a peak and an eruption is imminent,” he said.
Similarly, range-bound Ether recently traded at $1,835, down 0.2% from Thursday at the same time. Ripple’s XRP token and smart contract platform Cardano’s native cryptocurrency, ADA, have cut previous losses but are still down about 2% in a market that has remained reddish for more than a day. The CoinDesk Market Index, a measure of cryptocurrency performance, recently dropped 0.35%.
At least cryptocurrencies have found some affinity in a stock market that has increasingly steered itself away from digital assets, with the S&P 500 closing down 0.3%.
Bitcoin’s five-day volatility earlier this week was below that of the S&P, gold and Nasdaq 100, according to K33 Research. This has happened only a few times in recent years, and in each case it happened before a violent price swing occurred, Lunde said. .
The report also noted that BTC’s 30-day volatility, which measures the average price movement over the period, recently dropped to near five-year lows. At the same time, trading volumes fell to multi-year lows, and derivatives trading dropped sharply.
In Friday’s Crypto Is Macro Now newsletter, Noel Acheson, former head of research at CoinDesk, said he was “dismayed” by the recent monotony of the cryptocurrency market, despite the significant events swirling around. I am,” he said sarcastically. Anecdotally, to make sure that things change quickly when you start joking that BTC is a stablecoin. ”
Is Hodling starting to wane?
According to on-chain analytics firm Glassnode, the total supply of bitcoin, which was last active more than a year ago, has recently declined. The decline indicates that some long-term holders have decided to reduce their holdings.
The increasing supply of active assets in the past indicates that more investors are deciding to “hold” bitcoin rather than take profits. A decrease in that amount indicates the opposite.
The main age group in which supply has declined is between 12 and 24 months of age. A slight decline in bitcoin supply has been shown for the 5-7 year old age group as well, but the overall direction is higher.
Investors may want to monitor the behavior of long-term Bitcoin holders for signs of potential changes in sentiment.
This article was written and edited by CoinDesk journalists for the sole purpose of providing accurate information to our readers. CoinDesk can earn a commission for clicking links from Glassnode. Learn more about. Ethics policy.
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