Bitcoin To See Great Volatility Following Strong Geopolitical Moves

It has been just revealed that Bitcoin is going to see some pretty strong volatility waves due to the geopolitical issues that are taking place in the world. Check out the latest reports about this below.

Bitcoin has experienced a significant increase in volatility during the first week of October, and industry experts predict that this trend could persist throughout the rest of the month.

According to Bitfinex Alpha’s report on Monday, bitcoin has been more volatile than the past 200 days on average since the beginning of October.

The report also noted a historical pattern where major equity indices tend to experience volatility first before it affects other risk assets such as bitcoin.

Analysts cited the S&P 500’s volatility index, which has rebounded from a multi-year low on Sept. 15.

“Bitcoin and other crypto asset isolated high volatility events are continuing to rise and with historical volatility sustaining above crucial averages, this trend is likely to continue,” the report added.

On October 2, a single high volatility event occurred, where the 24-hour volatility increased by over 340%.

According to the report, the implied volatility in the bitcoin options market for October remained higher than the historical volatility, which is consistent with the increased volatility observed in the US equities market.

Bitfinex analysts stated that the current implied volatility for bitcoin is 37.8%, while the historical volatility is 32.4%, indicating that the options market is expecting more volatility for bitcoin than in the past.

Luke Nolan, a Research Associate at CoinShares Ethereum, has pointed out that there is a factor that could impact volatility in the cryptocurrency market.

This week’s U.S. inflation reading is an inflection point for volatility within the bitcoin and wider crypto market.

Nolan stated that Thursday’s CPI could be lower than anticipated, with a consensus projection of 3.7%, down from the former forecast of 3.8%.

Nolan added in CoinShares Crypto Monday update that this could bring volatility to the market, affecting digital assets. However, oil prices have rallied after Hamas’ weekend attack in southern Israel, which has seen traders adding a geopolitical risk premium to commodities.

The two major crude oil benchmarks saw an increase of almost 4% in early trading on Monday.

Higher oil prices may pose a challenge to the Federal Reserve’s target of achieving 2% inflation rate. Meanwhile, there is an ongoing dynamic between short and long-term holders of Bitcoin that is holding its price above the support level of $27,000.

According to Bitfinex analysts, the supply of BTC from short-term holders has decreased by almost one million coins since April 13, while the supply from long-term holders has increased by over one million BTC in the same period.