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Bitcoin’s Volatility May Be Calm Before the Storm — Crypto Market Daily

2020.07.01 Robbie Liu

The third financial quarter begins today after the price of Bitcoin (BTC) recorded a 42% increase in the second quarter. Meanwhile, the S&P 500 index surged nearly 20% to cap off the best second quarter since its creation in 1957. The impressive rally after the dramatic market selloff in March has led to huge gains for many market participants — which makes the third quarter subject to a lot of profit-taking risks. And we noted in yesterday's article, the third quarter has historically been more challenging for BTC. 

The volatility of Bitcoin’s price remains at an extremely low level over the last 24 hours as BTC consolidates in a range of $100. There has been very little change in the overall trend in all time frames. Right now, Bitcoin is trading around $9,135, per OKEx’s BTC Index Price. The sharp drop in volatility makes it difficult for traders to have many viable strategies. Both the three-month Implied Volatility and Realized Volatility have dropped to 3.4% — the lowest since the mid-March crash. 

BTCUSD – IV vs. RV. Source: skew

When observing the trading data in the derivatives market, there is also not much improvement. The BTC Long/Short Ratio remains near 1.0 and the Open Interest has not changed much since June 26.

BTC Futures Open Interest and Trading Volume. Source: OKEx

There is also not much volatility in the large-cap altcoins. Ether (ETH), the native currency of the Ethereum network, lost -0.42% and Litecoin (LTC) gained a slight 0.21%. Bitcoin SV (BSV) continues its bearish momentum and is down nearly -2% over the last 24 hours. 

The total cryptocurrency market capitalization stands at $263 billion and is down a slight -0.1%, while Bitcoin dominance remains at 64%, as per data from CoinGecko.  

OKEx Token Index Board (as of 10:00 am UTC). Source: OKEx

Top gainers and losers

  • ORS/USDT +49.35%
  • HYC/USDT +15.38%
  • APM/USDT +12.89%
  • BEC/USDT -17.17%
  • AAC/USDT -17.33%
  • MOF/USDT -32.26%

During Bitcoin’s consolidation, small-caps have seen some impressive action — but such opportunities are difficult to seize. 

After a huge 153% growth yesterday, Beauty Chain (BEC) lost -17.17% today. Molecular Future (MOF) pulled back -32.26% after gaining 65% yesterday. Those roller-coaster moves are not for inexperienced traders. 

Origin Sport (ORS) received a 49.35% increase, while Hycon (HYC) and apM Coin (APM) gained 15.38 and 12.89%, respectively. 

BTC technical analysis

Yesterday, Bitcoin tested the short-term threshold of $9,250 without success, and the downward pattern on the hourly chart is still intact. $9,040 is regarded as an intraday support level, per OKEx’s BTC Perpetual Swap price. If broken, it could mean the end of the current rally. 

On the daily chart, the 30-day moving average is about to cross down through the 60-day moving average to form a bearish crossover, which will create resistance.

The market has been surprisingly quiet for several days — possibly the calm before the storm. All trading actions should have stop-losses in place to prevent large swings leading to large losses. 

OKEx BTC Perpetual Swap 1h chart. Source: OKEx

ETH technical analysis

When looking at the price of ether, $233 and $217 are the two levels to watch in the midterm. 

Intraday resistance is sitting near $228. 

OKEx ETH Perpetual Swap 1h chart. Source: OKEx

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

OKEx Insights presents market analyses, in-depth features, original research & curated news from crypto professionals. Follow OKEx Insights on Twitter and Telegram.

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