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To say that bitcoin is volatile would be an understatement. So far this year, the world’s largest cryptocurrency has seen big swings – with all-time highs and sudden lows. The future of bitcoin is difficult to predict, but analyst Darius Dale said if the crypto crash was followed by low bitcoin volatility, there would be a new bear market in crypto.
Dale is the founder and CEO of 42 Macro, Director of Macro Risks at 42 Capital Management, and former Managing Director of Hedgeye Risk Management.
Bitcoin experienced 14 days of outage in May alone, according to Coin Metrics. So far this year there have been 39 days with daily fluctuations of 5% or more in both directions, CNBC reported. Others have tried to read the Bitcoin signs as well.
“The first half of 2021 has so far offered significant opportunities for Bitcoin bears to get it wrong”, Parts office reported.
A recent 27.5% drop in bitcoin in less than two weeks pushed the cryptocurrency into bear market territory. A bear market usually kicks in when prices fall 20% or more. Bitcoin has fallen into bear territory more than once this year, but it doesn’t tend to stay there for long, and its price generally recovers from the decline quickly.
Bitcoin hit a record high of $ 64,829 in mid-April. Today the cryptocurrency was trading at $ 38,012.60.
With Bitcoin trading in or near a band between $ 50,000 and $ 60,000 since mid-February, the crypto could experience a “long and fresh spring of modest new all-time highs followed by sudden declines,” Coin reported. Desk.
Dale’s company, 42 Macro, tweeted: “#Bitcoin is bearish but surprisingly shows a bullish divergence in volatility. Assuming price remains broken, a 10-day realized volume breakdown (which is + correlated to price)
Dale elaborated in a separate tweet, writing: “Put simply: a big downside reset in volatility would be the death knell of this crypto cycle if the price doesn’t recover in the face of it. Our time series analysis shows that all of the low theft spells of # Bitcoin have been during prolonged bear markets. “
Others seemed to agree with Dale’s terrible prediction.
“There is something concerning about a sharp drop in prices that has been accompanied by a drop in volatility,” Pierre tweeted @PHfloor.
Listen to GHOGH with Jamarlin martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, Bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset, including origin risk, speculative market structure, regulation, and environment. Are the larger financial markets in a massive speculative bubble?
Bitcoin’s fluctuations have come amid heightened regulatory oversight in the United States and abroad. The U.S. Federal Reserve is expected to release a paper outlining its own research into the central bank’s digital currency area.
“Bitcoin remains comically volatile,” Adam Crisafulli, founder of Vital Knowledge, told CNBC. “The economic utility of nothing quickly changes that.”
