The calm that returned to the Bitcoin (BTC) market can be short-lived, potentially preparing the way for a storm that could trigger significant price volatility, according to information from the decentralized crypto options platform on the chain.
Since March 12, BTC has settled in the range of $ 80,000 to $ 85,000 in a consolidation generally observed after a notable directional movement. Prices increased from $ 100,000 to $ 80,000 in previous weeks due to several factors, including President Donald Trump’s prices and disappointment concerning the lack of new purchases in the American BTC strategic reserve.
With the last consolidation, key volatility measures decreased, approaching monthly stockings. Volatility, however, is an average reopening, which means that the low volatility diet could soon pave the way for price turbulence, according to Derive.
“The weekly volatility of the BTC to the currency (ATM) fell below 50%to 49%, approaching monthly stockings of 45%. Volatility carried out also increased from 91%at the beginning of the month to 54%,” said Nick Forster, founder of Derive, in a recent shared note with Coindesk.
It is important to remember that volatility is the agnostic price, which means that the expected increase in volatility does not indicate the direction of the price movement in bitcoin.
“Volatility is an average renewal, so we can expect it to increase soon, probably at the levels observed in February (60-70%),” added Forster.
That prices increase or drop, volatility can increase, which suggests that significant price oscillations could occur in both directions.
According to Derive, several factors could trigger volatility, including “a ceasefire (or its absence) in Ukraine, or significant changes in cryptographic regulatory policy within the framework of the Trump administration”.
DERIVE is the first Protocol of OPTS ON AI on the world with a total locked value of almost $ 100 million. The protocol has recorded a cumulative negotiation volume of $ 15 billion to date.
The decision of the rate of the Wednesday federal reserve could also advance the markets.
The central bank is likely to maintain unchanged prices, traders evaluating two to three rate drops later this year. But a dominant surprise could recharge the bull engines for a sharp movement higher.
However, the Potential Fed reductions could be limited, according to BlackRock.
“The markets have evaluated approximately two to three basis of basic points rate this year, compared to expectations for one earlier this year. We believe that this reflects fears of the recession, even if the economic condition does not point to a slowdown. Even if prolonged uncertainty harms growth, we always see persistent inflation limiting how much the Fed can reduce,” said BlackRock in a weekly note.
The expected volatility boom could drop if the stock markets continue to drop, accelerating the drop in cryptography prices.
