As Bitcoin surged to a $66,000 price level during Asian trading hours, cryptocurrency markets brace for heightened volatility, with market observers predicting turbulent times ahead.
The cryptocurrency’s price volatility has been a subject of much discussion, particularly in light of recent events.
Semir Gabeljic, Director of Capital Formation at Pythagoras Investments, who highlighted the ongoing volatility cited a recent drawdown of 10% fueled by spot Bitcoin ETF outflows from GBTC, totaling approximately $300 million on March 20.
Gabeljic emphasized that such drawdowns typically occur in the lead-up to Bitcoin halving events, signaling a potential for increased volatility in the near future.
Meanwhile, the CoinDesk 20 (CD20), which tracks the world’s most liquid digital assets, experienced a minor dip of 0.5%.
However, amidst this overall market movement, CoinDesk’s Digitization Index (DTZ) saw a notable uptick, led by protocols like Ethereum Name Service (ENS), which rose by 2.7% during Asia trading hours.
Singapore-based trading firm QCP Capital noted the current consolidation in the market, with Bitcoin and Ethereum trading within a relatively tight range.
They suggested that the market might see a pause in activity over the weekend following the volatility leading up to the previous weekend’s Federal Open Market Committee (FOMC) meeting.
Also, QCP Capital highlighted the continued outflows from the Grayscale Bitcoin Trust (GBTC), expecting a fourth consecutive day of BTC spot exchange-traded fund net outflows.
The firm also pointed out a widening discount on Grayscale’s Ethereum Trust (ETHE) and the market’s diminishing expectations for the approval of a spot Ethereum ETF.
With Bitcoin’s test of $66,000 and ongoing market dynamics, cryptocurrency investors and analysts remain vigilant, anticipating further fluctuations in the days to come.
