The crypto market remained stable on Friday, with bitcoin trading little changed at $71,700 and ether (ETH) at $2,180, continuing the low-volatility price action that has characterized recent months.
Daily Bollinger Bands, a technical analysis tool that measures market volatility, are at their narrowest level since early 2024. In the past, such a narrow range — bitcoin has been between $63,000 and $75,000 since early February — has resulted in a 40% price swing, according to crypto analyst Eric Crown.
A breakout above $75,000 in Bitcoin would trigger bullish momentum by trapping traders who are short and need to buy at market prices to cover their positions, while a short-term move below $70,000 would liquidate around $200 million in long positions betting on the breakout, according to CoinGlass’ liquidation heatmap.
One of the key catalysts on Friday will be the US Consumer Price Index (CPI) data. Inflation in March is estimated at 3.3% year-on-year, driven by the surge in energy prices. High inflation figures tend to spur a rise in US dollar prices, which could weigh on risky assets like Bitcoin.
Positioning of derivative products
- Open interest (OI) on Bitcoin futures increased 1%, with average perpetual funding rates on major exchanges at their highest level since February 4. This shows a growing investor appetite for bullish exposure.
- Other major cryptocurrencies were mixed. OI increased slightly in XRP (XRP) while remaining stable in Ether (ETH) and Solana (SOL). HYPE and AVAX also stand out, showing a bullish combination of OI growth and positive funding rates.
- The privacy-focused ZEC, meanwhile, is showing growth in OI and negative rates, a sign that traders continue to short futures contracts and hedge against downside risks, even as spot prices rally. ZEC price reached almost $400, the highest since January 28.
- There appears to be a downward trend in BTC’s 30-day implied volatility index, BVIV. The metric fell to 45%, indicating market calm. It has fallen almost straight from 58% on March 31. The Ether Volatility Index shows a similar trend.
- The drop in volatility is largely due to flows linked to ETFs. “The ETF complex has created a feedback loop: institutions sell yield calls, which removes upside volatility, making selling more calls even more attractive. The impact is still subtle, but the direction of travel is clear. The Bitcoin options market is maturing into a structurally asymmetric market, just like stocks,” Maxime Seiler, CEO of STS Digital, told CoinDesk.
- The term structure of implied volatility is stable for the next six months, then increases from September onwards, suggesting that the market is bracing for a few quiet months in between.
- On Deribit, the BTC and ETH options continue to show put biases, although they are much weaker than a week ago, as traders look for upside bets, particularly the BTC call option at the $80,000 strike price.
Symbolic discussion
- CoinDesk’s DeFi Select Index (DFX) is the best-performing benchmark on Friday, up 0.38%, while the Bitcoin-dominated CoinDesk 5 (CD5) is down a quarter of a percent.
- The CoinDesk Computing Select Index (CPUS) is the worst performer, losing 1.4% after being dragged down by bittensor (TAO), which has lost more than 12% since midnight UTC after Covenant AI, one of the network’s largest subnet developers, announced it was leaving Bittensor.
- “The premise of Bittensor, the promise that attracted builders, miners, validators, and investors to this ecosystem, is that no single entity controls it,” Sam Dare, founder of Covenant AI, wrote on X. “This promise is a lie.”
- One token that ignored the broader crypto market apathy was DASH, which surged more than 19% since midnight UTC, contributing to a 34% 24-hour gain as traders turned their attention to the privacy sector.
