While many analysts await the implications of a possible increase in bank interest rates in the U.S. following the U.S.’s monthly inflation announcement later this week, noted economist and cryptocurrency analyst Alex Krüger says that from a historical perspective, a A lesser-known indicator could predict the start of a new period of Bitcoin price volatility.
To Report Daily Hodel, Kroger told his 146,200 Twitter followers that Bitcoin Volatility Index (BVOL) has monitored This index measures Bitcoin’s volatility over 30-day intervals on an annualized basis, using the Time Weighted Average Price (TWAP).
According to Kruger, from a historical point of view, the closing of the Bitcoin Volatility Index below the number 25 was the introduction of the beginning of the big price movements.
Every time the Bitcoin Volatility Index has closed below 25, it has followed a sudden movement in the price of Bitcoin in a short period of time. Two upward movements and one downward movement (November 2018).
This economist says that the announcement of the consumer price index (CPI) in the United States (which is one of the main tools for measuring inflation in this country) on Thursday could be a fundamental trigger for the start of the next wave of fluctuations in the price of Bitcoin in an upward or downward direction. Since the September inflation rate of this year is expected to have grown by 8.1% compared to the same period last year, a significant difference in the announced rate can cause volatility in the price of Bitcoin.
While Bitcoin is trying to break through its long-term (one-year) diagonal resistance line, the market’s technical conditions are also showing a bullish trend, says Kruger.
Bitcoin conditions look good; Everyone is waiting for the same level of failure.
The economist also noted the recent seemingly tight correlation between the digital currency market and stocks. He shared a chart showing the correlation between Bitcoin and the Nasdaq.
it is unbelievable. Other cryptocurrency traders should probably use Nasdaq futures to hedge their long positions instead of ethereum or bitcoin perpetual futures.