Bitcoin is climbing by more than 3% at the time of writing, amid a risk-on session as cryptos rebound alongside other risk assets such as US equity futures.
To be certain though, the world’s oldest and largest crypto is still trading around levels not seen since December 2020.
Recall our crypto report dated May 10th which contained this line:
“Perhaps more worryingly for HODLers, from a technical perspective, there is little by way of support between the $30k and $20k regions for Bitcoin prices …”
Sure enough, despite hovering around that psychologically-important $30k for weeks after our May 10th article, Bitcoin then sliced through the charts all the way down to $20k like a red-hot knife through butter.
That stunning drop was largely driven by the broad deleveraging and liquidations across the crypto world. DeFi applications and crypto lenders are being forced to consider unprecedented measures to protect themselves against contagion risks, and to stay alive.
Will this crypto calm last?
Perhaps as some solace for the world’s oldest and largest cryptocurrency, the expected 30-day volatility has eased away from its year-to-date highs.
However, once recent peaks in the T3i BitVol index have been stripped away, the implied volatility over the next 30 days is still around its highest since Q4 2021 - the period when Bitcoin began its decent from its all-time high (Bitcoin has lost as much as 74.5% since).
In short, this index suggests there could still be more volatility headed Bitcoin’s way, albeit to a lesser extent … potentially.
That might translate into more stable trading around the $20k handle, with Bitcoin bulls hoping to test resistance at the longer-term 200-week moving average which currently resides around $22,370.
In the meantime, crypto investors and traders are set to remain tepid, awaiting the next major signal for global markets.
What to look out for?
And of course, in between all of the above-listed factors, more worrying headlines out of the crypto world could yet inject more volatility into a sector that is still striving for maturity.