Bitcoin Still Trapped Below USD 30,000

Crypto traders remain committed to risk-off after having experienced nine-week decline. Bitcoin is expected to further fall 27% decline this month, although it is up 10% from its recent extreme low at $25,840 on 12 May.

The most famous cryptocurrency declined by nearly 3% over the past 24 hours’ trading and is on track to end the month in the red territory. Almost all cryptos traded lower on Friday despite another move upward in US stocks.

The cryptocurrency is still down by 40% so far this year, compared with a 13% drop in the S&P 500 and a 22% dip in the Nasdaq 100 over the same period. So far, it has been a tough year for all hypothetical assets.

On the short term, prices could stabilize. There was massive short selling over the last few weeks, which may signal further squeeze in the upcoming weeks. Equity markets are expected to rebound in case of stronger global growth conditions, assuming that interest rate expectations and bond yields stay calm for a period of time, which is likely as inflation will temporarily slow down, first in the US and all over the globe. Central banks, in turn will briefly cool their newfound hawkishness.

The short-term rise in stocks could be a tailwind for crypto, assuming the high correlation between both assets remains unbroken. On the other hand, the decline in cryptos may signal limited upside in stocks as risk-off sentiment persists.

●Bitcoin (BTC): $28,940, −1.83%

●Ether (ETH): $1,760, −4.35%

●S&P 500 daily close: 4,158, +2.47%

●Gold: $1,857 per troy ounce, +0.51%

●Ten-year Treasury yield daily close: 2.74%


For now, bitcoin remains trapped within a tight range as volatility returned to normal levels. But over a six-month horizon, implied volatility remains elevated, and there has been stronger demand for puts downside protection versus calls.