Bitcoin topped $61,000 during early European trading hours, even as volatility continues to plague markets.
The Bitcoin Volatility Index, which measures the volatility of BTC in U.S. dollars, is currently at 3.07%. It climbed to its highest rate in the past year, 3.25%, on August 10, a day after Bitcoin dipped below $54,000, but has been slow to recede.
At the time of writing, the price of Bitcoin is now sitting around $60,860 after having gained 5% in the past day, per data from CoinGecko.
Despite the glimmer of green, there’s still uncertainty among traders, Nathan Gauvin, CEO of Gray Digital told Decrypt.
“This volatility is exacerbated by the broader economic environment, where signs of slowing economic growth and rising recession fears have led to increased caution among investors,” Gauvin said. He added that while anticipated rate cuts by the Federal Reserve could provide some relief, “the current market sentiment remains cautious, as evidenced by fluctuating trading volumes and mixed performance across major cryptocurrencies.”
The Federal Reserve’s Open Markets Committee is next scheduled to make a decision on interest rates on September 18. But even good news like the Fed cutting rates, which traders are certain will happen in September according to the CME FedWatch Tool, could have a muted effect.
Many investors seem to be waiting for the dust to settle after the election, Gauvin added, because “the crypto market’s ability to capitalize on positive macroeconomic developments remains constrained.”
But looking ahead, traders seem to be more certain that markets will end the year in good standing. For starters, there are already signs that global liquidity has been improving, Real Vision Chief Crypto Analyst Jamie Coutts told Decrypt.
He pointed out that over the past month, the Bank of Japan and People’s Bank of China have added $400 billion and $97 billion worth of liquidity, respectively.
“The broad global money base (credit) has expanded by $1.2 trillion, which has been significantly aided by a sharp decline of the US dollar,” Coutts added. “This suggests that it is coordinated with the Fed’s consent.”
He also pointed out that gold has been setting new all-time high prices lately—even though the correlation between Bitcoin and gold has loosened substantially since the start of the year.
“Bitcoin has been sluggish since the Yen carry unwind,” he said, “unless there is a massive geopolitical event, Bitcoin is likely to outperform everything else.”
Sebastian Sinclair contributed to this report.
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Source: https://decrypt.co/245451/bitcoin-tops-61000-as-volatility-hovers-near-yearly-high
