**Bitcoin Volatility Expected to Increase, According to Bitfinex Report**
In a recent report by Bitfinex Alpha, a weekly analysis from cryptocurrency exchange Bitfinex, it has been stated that bitcoin (BTC) is likely to undergo heightened volatility in the coming months. The crypto market has been experiencing a prolonged period of low volatility, but recent events have indicated a shift in this trend.
Bitfinex Alpha analysts revealed that bitcoin’s 24-hour volatility recently saw a significant 1,200% spike within a nine-hour period. This surge in volatility was driven by bitcoin’s price surpassing the $30,000 mark and reaching $35,000.
The report emphasizes that the current volatility levels are above bitcoin’s 200-day average, suggesting that both event-based and daily average volatility have increased. This indicates a potential end to one of the longest low volatility environments in bitcoin’s history.
Bitfinex has been predicting heightened volatility for bitcoin in the coming months in its previous editions of the Bitfinex Alpha report. These predictions have been confirmed by recent market events.
In August, Bitfinex warned traders of impending volatility after a period of stagnation in bitcoin’s price. On-chain indicators, such as implied volatility outpacing historical metrics, further supported the expectations of traders.
Bitcoin’s temporary surge from $28,000 to $30,000 on October 16 was triggered by unverified news regarding the approval of BlackRock’s spot bitcoin exchange-traded fund application by the U.S. Securities and Exchange Commission. This movement validated Bitfinex’s previous forecasts.
On-chain indicators suggest that the market is currently in a period of volatility, which is likely to continue in the coming months. Metrics like the Estimated Leverage Ratio show potential short-term consolidation and a ranging market before further volatility ensues.
However, bitcoin’s surge on October 16 was short-lived, as the asset fell back to the $28,000 mark. This led to the largest short liquidations since August 17, with $187 million in liquidations across long and short positions.
The report highlights the sensitivity of the crypto market to high-volume trades, especially during periods of low liquidity. The rapid price movements were not solely due to a short squeeze but were significantly influenced by the market’s immediate response to the spot ETF news.
It is important to note that this report comes from Bitfinex and should be considered alongside other sources and market analysis.
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