Key Takeaways:
- Bitcoin volatility has increased in the first week of October, and analysts forecast that this trend could continue for the rest of the month.
- Factors that could drive volatility in the cryptocurrency market include the upcoming U.S. CPI reading on Thursday and the recent rally in oil prices.
- Bitcoin’s price is currently being held at a support level above the $27,000 mark by a dynamic between short and long-term holders.
Bitcoin volatility increased in the first week of October, and analysts forecast that such conditions could endure for at least the rest of the month.
According to a report by Bitfinex Alpha, “Since the beginning of October, bitcoin has been more volatile on average than the past 200 days in the asset’s history.”
Related: Bitcoin Halving 200 Days Away: What to Expect
The report highlighted a historical trend where major equity indices experience volatility first before it spills over to other risk assets such as bitcoin. Analysts cited the volatility index for the S&P 500, stating it has rebounded from a multi-year low on Sept. 15.
The report also noted that the bitcoin options market showed implied volatility in October remaining above historical volatility, a rise that is in sync with similar volatility increases in U.S. equities.
Other factors that could drive volatility in the cryptocurrency market include the upcoming U.S. CPI reading on Thursday and the recent rally in oil prices.
Bitcoin’s price is currently being held at a support level above the $27,000 mark by a dynamic between short and long-term holders. According to Bitfinex analysts, BTC short-term holder supply is now down by nearly one million coins since April 13, with long-term holder supply up by over one million BTC in the same period.