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Ark Investments

Bitcoin price volatility hits 2021 high as one analyst paints $15,000 target

Wild price fluctuations are likely in the top two cryptocurrencies as both record a dramatic spike in their 30-day realized volatility charts.

The current cryptocurrency market scenario is only for traders that have an extremely high appetite for risks. But for the weak-hearted ones, analysts advise patience and caution ahead.

The outlook stands tall for Bitcoin (BTC) and Ether (ETH), the top cryptocurrencies by market capitalization that more or less behave as locomotives for the rest of the crypto market. As of Wednesday, the ETH/USD Realized Volatility on a 30-day timeframe has reached near its 2017 peak levels, according to data provided by Skew.

Bitcoin and Ethereum 30-day realized volatility reaches 2021 high. Source: ByBt.com, Skew

Meanwhile, ByBt.com shows Bitcoin’s 30-day volatility at its yearly high, suggesting that the benchmark asset remains at risk of wild price fluctuations in the sessions ahead. Simply put, the top two crypto-assets show a likelihood of moving in either direction with a higher degree of volatility. All and all that could mean both aggressive gains and losses for daytraders.

Buying in a falling market

The volatility alarm rings at the time when both Bitcoin and Ether have posted incredible recovery rallies following their recent price declines. In retrospect, the BTC/USD exchange rate plunged more than 50% after topping near $65,000 in April — a correction partially driven by Elon Musk’s anti-Bitcoin tweets and China’s crypto ban reiteration last week.

Ethereum, whose positive correlation efficiency with Bitcoin currently sits near 0.88, tailed the benchmark digital asset’s bearish correction. The second-largest cryptocurrency experienced a maximum of 60% decline in its market valuation — compared to its record high of $4,380 from mid-April.

But bulls saw opportunities in the said price dips, insomuch that they helped Bitcoin and Ether prices recover by up to 36.12% and 68.52% from their local price bottoms, respectively. Some analysts anticipated that the upside retracement would extend further based on supportive macroeconomic catalysts, mainly inflation fears.

Tech bull Cathie Wood, who heads Ark Investment Management, reiterated her $500,000 bitcoin price target after last week’s crash, calling the dip “a really great time to buy.”

Nevertheless, many also cautioned traders against buying during a bearish correction phase, especially after a yearlong price rally that increases the risks of profit-taking by long-term investors. Analysts at BiotechValley Insights Consulting Group noted that Bitcoin dropped hard even after the U.S. Consumer Price Index rose to 4.2%, stating that the crypto market is now going through an “anxiety stage.”

“I believe Bitcoin has a long way to fall from here,” one of the BiotechValley analysts wrote in a note. “I think it will slowly grind down the slope of hope with a periodic dead cat bounce.”

“I think it will slowly grind down the slope of hope with a periodic dead cat bounce.”

The group called for a $15,000-$16,000 price target for Bitcoin.

Lower risk-appetite? Just wait

Koroush AK, an independent market analyst, took a rather middle approach. He advised traders to wait for a clear bounce above short-term resistance levels before determining their market bias. Excerpts from his tweet:

“After a 60%+ market crash, it’ll take more than a small bounce for me to shift bias back to bull market bullish. Cautious until we capture $45,000 BTC and $3,400 ETH. [I] will be patient here. Don’t need to catch exact bottoms or sell exact tops to make money.”

The recent rebound has coincided with an increase in the number of outstanding Bitcoin Futures contracts from $11 billion to $11.88 billion, showcasing a steady climb in leveraged positions in the derivatives market. Meanwhile, more than $12 billion worth of long positions has been liquidated since the May 19 price crash.

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bitcoin volatility

Federal Reserve Bank Presidents: Cryptocurrency Sell-off Not a Systematic Concern, Does Not Affect Fed Policy

Cryptocurrency sell-off is not a systematic concern for the Fed and does not affect Fed’s policies, two Federal Reserve Bank presidents said Wednesday. “We are all quite aware that crypto can be very volatile,” said the president of the Federal Reserve Bank of St. Louis. Crypto Sell-off Does Not Change Fed Policy Two Federal Reserve […]

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Apple

Binance CEO CZ: Bitcoin is less volatile than stocks like Apple and Tesla

Changpeng Zhao says the crypto faithful are in it for tech compared to gain chasers looking for the next “moon-shot gem.”

Binance CEO Changpeng Zhao has commented on the volatility of Bitcoin (BTC), stating that the largest crypto by market capitalization is probably less volatile than the stock prices of similarly-sized companies by market capitalization such as Apple and Tesla.

Data from Woobull shows Bitcoin’s 60-day volatility steadily declining since the start of 2021. However, figures from the investment research portal AlphaQuery show that Tesla and Apple stock prices still have significantly lower 60-day volatilities over the same period.

BTC 60-day Volatility, courtesy Woobull Charts

Speaking during an interview with Bloomberg TV on Monday, the Binance chief argued that crypto’s volatility was not unlike the situation in the stock market, adding: “Volatility is everywhere […] It is not unique to crypto.”

For Zhao, yield chasers who are often not as committed to crypto projects as the actual true believers are often to blame for choppy price actions due to their large numbers.

“There’s always a large number of people having the herd mentality than the guys who actually do serious research.”

“Whenever there is some negative news, they [herd followers] run away, whenever there’s positive news, they try to rush in and so they do cause more volatility,” Zhao stated.

The executive’s characterization of crypto believers as being more “die-hard fans who understand and really love the project” is consistent with his previous remarks about his personal disposition to the industry as a whole.

Back in April, Zhao revealed that he holds nearly 100% of his net worth in cryptocurrencies.

The crypto market is enjoying a Monday of significant gains, with the total market capitalization up more than 4.5% in the last 24 hours.

Ether’s (ETH) climb to breach the $3,000 mark for the first time ever has been the highlight of the day especially among the top-10 ranked tokens according to market capitalization.

Bitcoin appears set to test the $60,000 mark for the first time since mid-April, which preceded a minor correction below $50,000 on April 24.

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antifragile

‘Black Swan’ Author Pulls a 180- Nassim Taleb Says ‘Bitcoin’s a Failure, at Least for Now’

On February 12, the well known Lebanese-American essayist and risk analyst, Nassim Nicholas Taleb, declared that the leading digital currency bitcoin is a failure, at least for now. Cryptocurrency fans have been upset by Taleb’s recent statements, after it seems the renowned author has done a complete 180 after supporting the crypto asset for years. […]

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