Bitcoin tests $66k level, as number one crypto “remains volatile”

22 Mar 2024

Although Bitcoin’s volatility remains, analysts expect a degree of calm in the market shortly.

The world’s largest cryptocurrency tested $66,000 during Asia trading on Friday, as market observers predict more volatility ahead.

“Bitcoin remains volatile with the drawdown of 10% we saw this week, with the recent catalyst being driven by spot Bitcoin ETF outflows from GBTC of about 300mm on March 20,” said Semir Gabeljic, Director of Capital Formation at Pythagoras Investments.

“The drawdown still remains in line with the expected range of 10-20% as we’ve seen historically that happens right before the BTC halving event. More volatility is expected to come going into the BTC halving,” he added.

Furthermore, the CoinDesk 20 – which is a measure of the most liquid digital assets in the world - has fallen 0.5%.

Additionally, CoinDesk’s Digitization Index (DTZ), which gauges the performance of digitization protocols such as Ethereum Name Service (ENS), was the best-performer during trading in Asia, with a rise of 2.7%.

According to Singapore-based QCP Capital on Friday morning, the market is consolidating with Bitcoin and Ether trading in a “relatively tight range” and that the market “might take a break this weekend” following the pre-FOMC volatility last weekend.

Moreover, the trading house also commented that there were steep outflows from the Grayscale Bitcoin Trust (GBTC), with as much as $358.8 million leaving the fund. QCP predicts a fourth straight day of BTC spot exchange-traded fund net outflows, CoinDesk reports.

Regarding Ether, QCP forecasts the market is beginning to price out the likelihood of the approval of a spot Ether ETF in the near future.

“The Grayscale ETH discount has widened from -8% to -20% over the past two weeks,” QCP stated.

Prediction markets also mirror this sentiment. On platforms like Polymarket, there is a contract inquiring about the approval of an Ethereum ETF by May 31, currently trading with a 21% probability of it being approved.

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