Bitcoin’s (BTC) recent price movements show a newfound stability in the crypto market, according to on-chain analysis firm Kaiko. 📊
Last week, amidst some US macroeconomic updates, Bitcoin had a brief surge from $66,000 to nearly $70,000 before settling back above $66,600. Even with a 4% dip and more selling on exchanges, Bitcoin’s 60-day historical volatility has stayed below 50% since early 2023. This is a big change from 2022 when volatility often exceeded 100%.
2024 has seen Bitcoin’s volatility hit an all-time low of 40%, even as it reached record highs—a stark contrast to the over 106% volatility in 2021. This suggests a maturing market, with more BTC trades during the US market close. 🏛️
This shift in market structure, along with the strong performance of spot BTC exchange-traded funds (ETFs) in the US, seems to be influencing current price stability. Plus, BlackRock becoming the manager for the world’s largest spot Bitcoin ETF, surpassing Grayscale’s GBTC, highlights the evolving landscape of Bitcoin investment. 🚀
**ETFs Dip After FOMC Meeting**
Despite the overall strong performance of spot Bitcoin ETFs in the US, a streak of 20 consecutive days of inflows was broken last week. Now, there are three consecutive trading days of outflows, with over $550 million last week and $146 million on the first day of the current trading week. 📉
Jag Kooner, Head of Derivatives at Bitfinex, points to two reasons for this. First, investors might lack conviction and are selling below their cost basis. "ETF investors tend to magnify market moves," Kooner said, noting a similar trend in April when net inflows of over $1 billion occurred at BTC range highs, followed by outflows at range lows. 💸
The second reason is the unwinding of the basis arbitrage trade, with significant outflows registered concurrently with a $1.2 billion decline in CME futures open interest for BTC in the past 10 days. "As funding rates went negative amidst the price decline, ETF inflows that were part of the basis trade have unwound," Kooner added. ⚖️
