Latest news with #Volmex
Yahoo
3 days ago
- Business
- Yahoo
Two Ways This Bitcoin Bull Market is Sturdier Than 2020-21 and 2017
Bitcoin BTC has long been criticized for its high volatility, with bull runs marked by sudden, sharp pullbacks that would qualify as full-blown bear trends in stocks. However, the latest bull market, which kicked off in early 2023, feels different in a positive way, exhibiting relatively low volatility and drawdowns. According to data tracked by Glassnode, bitcoin's realized volatility on a three-month rolling basis has averaged less than 50% during this bull cycle, significantly lower than the 80% to 100% observed during previous bull runs. The same thing can be said about the 30-day implied volatility, tracked by Volmex's BVIV index, which has been in a downtrend, according to data source TradingView. The implied volatility refers to the expected price turbulence over a specific period and is a forward-looking metric. The stability likely stems from bitcoin's ever-growing market capitalization, which inadvertently fosters stability and increased institutional participation through ETFs and derivatives. "Boasting a market capitalization of over $2T, Bitcoin now ranks as the 7th largest asset worldwide. As liquidity deepens, and the valuation of an asset reaches these heights, the capital required to meaningfully move the price of the asset becomes significantly larger," Glassnode said, explaining the volatility meltdown. "Additionally, the launch of the US Spot ETF Products, supplemented by increasing regulatory clarity, has altered the underlying composition of the investor base, allowing sophisticated, institutional investors and capital to gain exposure to bitcoin for the first time," Glassnode added. Pull up the price chart from 2020-21, and you'll see that bitcoin's then-bull run from $4,000 to $70,000 had several steep price pullbacks, sometimes more than 30%. In traditional markets, a drawdown of over 20% is typically considered a bear market. Now compare it to the rally from roughly $30,000 to over $100,000 since March 2023, and the picture looks different. It has been a stair-step ascent, characterized by an impulsive move higher followed by broad accumulation ranges that set the stage for the next leg higher. "We've observed a shallower drawdown profile relative to previous bull markets, with the current cycle drawdowns generally less than -25% from the local high, with only two instances exceeding -30%," Glassnode said. The change in character is again linked to institutional participation, lower leverage and speculative excesses in the broader market. Major exchanges, including Binance, offered 100X leverage during the previous bull runs, allowing investors to control a significantly larger trading position. Such use of leverage helped investors juice up profits but also magnified losses, resulting in liquidation cascades and frequent double-digit price corrections. However, exchanges eventually cut down the leverage significantly, curbing speculative excesses. That seems to have contributed to the sturdier rally this time.
Yahoo
4 days ago
- Business
- Yahoo
Bitcoin's $95K-$105K Range in Focus as $10B BTC Options Expiry Looms
Bitcoin BTC options worth billions of dollars are set to expire this Friday at 08:00 UTC on Deribit, making the $95,000 to $105,000 range a critical zone for potential volatility and directional cues. At press time, a total of 93,131 bitcoin monthly options contracts, worth over $10 billion, were due for settlement, with 53% being calls and the remainder being puts. A call option represents a bullish bet on the market, while the put option offers insurance against price slides. On Deribit, one options contract represents one BTC. The open interest distribution is such that a large amount of "delta" exposure is clustered at the $95,000, $100,000 and $105,000 strikes. This means traders holding positions at these strikes have a significant net directional risk to bitcoin's price. Gamma, which measures the sensitivity of options to changes in BTC's price, will peak as the expiration nears. Therefore, price volatility could trigger widespread hedging by both investors and market makers (who are always on the opposite side of investors' trades), further exacerbating price turbulence. "The largest delta concentration is in Deribit BTC's May 30 expiry, with $2.8B delta exposure led by strikes at $100K, $105K, and $95K, which has a potential for strong gamma-driven flows into month-end," decentralized crypto trading platform Volmex said in an explainer on X. "Any move can trigger aggressive dealer hedging, fragile gamma environment! Expect volatility!," Volmex added. At press time, Bitcoin changed hands at $107,700, having reached record highs above $111,000 the previous week, according to CoinDesk data. Deribit's DVOL index, which represents the options-based 30-day implied or expected volatility, continued to decline, suggesting minimal concern over volatility driven by the upcoming expiry. Volmex's annualized one-day implied volatility index ticked slightly higher to 45.4%. That implies a 24-hour price move of 2.37%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-05-2025
- Business
- Yahoo
Forecasting Fed-Induced Price Swings in Bitcoin, Ether, Solana and XRP
It's Fed day again, and traders are seeking cues on how much volatility this key event might spark. According to Volmex's implied volatility indices, major tokens could see price swings, but nothing out of the ordinary is anticipated. According to data source TradingView, Volmex's annualized one-day bitcoin implied volatility index (BVIV) stood at 49% as of writing, which equates to an expected 24-hour price swing of 2.56%. In other words, bitcoin (BTC) could swing by $2,470 in either direction. As of writing, bitcoin changed hands at around $96,500. The expected daily volatility in percentage terms is determined by dividing the annualized percentage by the square root of 365, as the digital assets market is open 24/7. In traditional markets, conversion from annualized to daily involves the square root of 252 days. As of writing, Ether's (ETH) annualized one-day volatility was 66%, suggesting a 24-hour price swing of 3.45%. Similarly, Volmex's one-day implied volatility index suggested a 24-hour move of 4.3% in Solana's SOL. Volmex doesn't publish volatility indices tied to payments-focused cryptocurrency XRP. That said, the expected move in the token could be gauged from the forward implied volatility (IV) derived from options listed on Deribit. The forward IV for May 8 was 77.98% at press time, according to data source Amberdata. That equates to a one-day expected move of 4.08%. The Federal Reserve will announce its rate decision at 18:00 UTC, which will be followed by chairman Jerome Powell's press conference at 18:30 UTC. The central bank is expected to hold rates unchanged, but commentary on the economic outlook against the trade war backdrop and possibility of a rate cut in June could move markets.
Yahoo
05-04-2025
- Business
- Yahoo
Solana's SOL Could See Nearly 6% Price Swing as Whales Dump Coins Before U.S. Jobs Data
Solana's SOL token is poised for a potential price swing of almost 6% after some large investors, or whales, dumped their holdings ahead of the U.S. non-farm payroll (NFP) report due later Friday. This estimate comes from Volmex's one-day implied volatility index (IV) for SOL. At press time, the index showed a one-day reading annualized at 109.70%, indicating an expected 24-hour price volatility of 5.74%. (The daily figure is derived by dividing the annualized volatility by the square root of 365, the number of trading days in a year.) A movement that size represents moderate volatility, especially considering that the cryptocurrency has experienced several days of 6% or higher volatility since early March, according to data from CoinDesk. In other words, the market is likely to be volatile, but nothing out of the ordinary. Data tracked by blockchain sleuth Lookonchain shows several whales unstaked and dumped SOL worth $46.3 million into the market. Large offloading of coins by whales often leads to bearish price action. However, the amount sold early today equates to 0.97% of the cryptocurrency's 24-hour trading volume of $4.7 billion. So, it's no surprise that SOL is trading little changed at around $116, having printed a low of $112 on Thursday. Broadly speaking, the cryptocurrency has been in a downtrend since reaching a high of $295 on Jan. 19. The U.S. jobs data, scheduled for release at 12:30 GMT, is forecast to reveal that the economy added 130,000 jobs in March, slowdown from February's 151,000 and well below the 12-month average of 162,300, according to FactSet. The median estimate for the jobless rate for March is is 4.2%, the highest since November and up from February's 4.1% reading. Average hourly earnings are forecast to have risen 0.3% month-on-month, matching February's pace. A weaker-than-expected figure will likely validate renewed pricing for four 25-basis-point interest-rate cuts this year, potentially sending risk assets, including cryptocurrencies, higher.
