For a month now, the top two cryptocurrencies are trading sideways. Bitcoin is trading 1.06% lower in the past 24 hours at $19,294, and Ether has lost 1.77% trading at $1,305. Bitcoin’s correlation with stocks remains at historic highs. Its price is largely driven by macro trigger points such as central bank policy and economic data reports.
However, Bitcoin has been turning heads because of its uncharacteristically low volatility in recent days. Clara Medalie, Kaiko’s director of research, said the much-loved cryptocurrency has failed to make significant moves since early June. Its prices have been bouncing between an increasingly narrow range. Medalie outlined that trade volumes have remained relatively resilient since 2021’s all-time highs, as there is no discernable decrease in volumes since September despite the increasingly low volatility.
Moreover, investors are unconfident about $18,200 being the bottom because this level weakens every time it is tested. As such, bulls have to keep the momentum during this week’s $510 million options expiry. With Bitcoin’s stand at the $19,000 mark, most bearish bets will likely become worthless. Analysts believe that if BTC’s price remains above $19,000 on October 21, only 4% of these put-sell options will be available. This happens when a right to sell Bitcoin at $18,000 or $19,000 is worthless as Bitcoin trades above that level on expiry. There is a need for bears to push Bitcoin below $19,000 to secure an $80 million profit. And bulls have to pump it above the crucial $21,000 for a $150 million gain.
Edward Moya, a senior market analyst for Oanda, highlighted that crypto is locked into consolidation mode and will continue until investors are convinced of the risks of the Fed over-tightening and sending the economy into a severe recession are gone.