Bitcoin fell before this week’s Fed monetary-policy statement

  /  3 minutes read
  • Bitcoin dropped below $29,000 for the first time in a month.
  • The Bitcoin Implied Volatility Index has reached a new low.
  • Ethereum fell more than 2% to $1,840. 
  • Worldcoin, founded by OpenAI founder Sam Altman, launched its mainnet.
  • The SP500 Index (SPX) fell from its high of 4,580.
  • The NASDAQ fell towards the 15,500 level as tech stocks fell sharply. 

Bitcoin momentarily fell below $29,000 on Monday for the first time in more than a month. Ripple’s XRP and Solana’s SOL led the pace as major fell throughout the day. SOL fell more than 7%, while XRP fell more than 6%. The sluggish performance of cryptos contrasted with that of major U.S. equities indexes, which increased on Monday, with the tech-heavy Nasdaq Composite and SP500, both of which have a significant technology component, nudging up 0.1% and 0.4%, respectively. The Dow Jones Industrial Average rose 0.5%. After previously correlating largely, digital assets and stocks have become progressively disconnected this year.

Bitcoin volatility index

The market has reached a temporary equilibrium as it awaits the Fed, ECB, and Bank of Japan decisions later this week. Their actions and remarks will very certainly complete the market consolidation and set the tone for the coming weeks

Deribit's Bitcoin volatility index (DVOL):

Since the crypto options exchange established the tracker in early 2021, the Bitcoin Implied Volatility Index has dropped to its lowest points. Deribit’s Bitcoin volatility index reaches all-time lows, suggesting sideways movement. Deribit Implied Volatility Index is referred to as DVOL.

Bitcoin volatility index

By examining option activity, it provides a prediction of the anticipated volatility for a crypto asset over the following 30 days. Simply said, the index can show investors’ anticipated price volatility for a certain cryptocurrency. Implied volatility (IV) levels for Bitcoin have been substantially lowered as a result of the ongoing low liquidity. The lack of volatility is likely to persist, and derivatives traders are not optimistic that there will be any significant swings in the cryptocurrency markets in the near future.

Bitcoin Price Analysis:

Bulls in bitcoin attempted to raise the price above 29,500 once more, but the extended wick on the candlestick indicates that intense selling occurred at higher levels. Selling accelerated, and the price fell below the sturdy support level of $29,000, which had stood firm for several days. The BTC/USDT pair has fallen to a critical level that has to be watched. If the price keeps falling and breaks through $29,000, it will indicate that the bulls have lost hope. The pair might later fall to $28,500 and eventually $28,000.


Concluding Thoughts:

Bears are attempting to take control as Bitcoin plummeted to $29,000. The inability to maintain the higher levels appears to have enticed short-term bulls to book profits and aggressive bears to start short bets. Long-term investors are unconcerned and are still holding onto their investments even though the near-term outlook is bleak. The US stock markets are still in good shape even though the cryptocurrency markets have temporarily turned soft. Its longest run since 2017, the Dow Jones Industrial Average has increased for 10 straight days. The Federal Reserve’s policy announcement on July 26 and a rush of important earnings reports this week, though, might shift the situation. The latter may have an effect on the US Dollar Index (DXY), which is currently on a recovery path.

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