During the week, Bitcoin’s trend continued to be flat. So sticky is the current range that the Bitcoin Historical Volatility Index (BVOL) is currently trading at rarely seen lows.
Economist, trader and entrepreneur Alex Krueger noted that all previous BVOL macro lows have been followed by "explosive volatility."
Today, BTC whales appear to be redistributing their holdings. According to data tracked by CryptoQuant, more than 37,800 bitcoins left cryptocurrency exchanges yesterday, and bitcoins worth $740 million were transferred out, the largest single-day outflow of bitcoins in nearly four months.
In addition, as the financial reports of US companies will be released one after another, technology stocks are especially vulnerable to affecting the market when their performance falls short of expectations. More than 20% of companies in the S&P 500 report earnings, and the S&P 500, like other U.S. indexes, has shown rare weakness this year.
Outside of stocks, the U.S. dollar index (DXY) was unchanged heading into the new week, so far avoiding a retest of 20-year highs seen earlier.
Bitcoin is less volatile than the stock market, which appears to be a relatively positive development. However, some cryptocurrency traders warned that this might not be a good thing in an environment of low volume. While no immediate policy changes from the Federal Reserve are expected this week, external forces will still provide plenty of fuel for cryptocurrency volatility.
Summarize
Cryptocurrencies have been hit hard as the Federal Reserve and other central banks aggressively hike rates to keep inflation in check. This low volatility, low volume headwind could mean prices for cryptocurrencies fall faster, potentially triggering a sell-off. This has also caused many investors to gradually leave the field, which is indeed a big change compared with the hype-induced frenzy of the past few years.