Bitcoin
and other cryptocurrencies were steadying on Tuesday as investors in digital assets digested a selloff last week that snapped an extended period of uncommonly low volatility. But crypto traders are bracing for yet another storm.
The price of Bitcoin has traded flat over the past 24 hours at around $26,050 after the largest digital asset plunged to near $25,500 in recent trading, revisiting the trough seen in the wake of last week’s selloff to the lowest level since mid-June. Analysts are eyeing Bitcoin as vulnerable to further declines with the token below key technical levels, including its 200-day moving average.
“Next support is already in reach near $25,200,” said Katie Stoctkon, managing partner at technical research firm Fairlead Strategies. “Secondary support is … currently around $20,600.”
Prior to the rout in crypto markets last week, Bitcoin had been in the midst of its lowest volatility in its history—lagging excitement in the stock market, where the
Dow Jones Industrial Average
and
S&P 500
have been whipsawing. While violent swings have subsided for now, traders are far from complacent, with pricing in the crypto derivatives market suggesting a surge in careful positioning.
“While historical volatility rocketed, it was the surge in implied volatility—the market’s crystal ball—that should make investors take notice,” analysts at crypto exchange Bitfinex wrote in a note. “This metric is still higher than historical volatility, and suggests traders are bracing for even more choppy waters ahead.”
Beyond Bitcoin,
Ether
—the second-largest crypto—was down less than 1% to $1,670. Smaller tokens, or altcoins, were weaker, with
Cardano
down 2% and
Polygon
declining 4%. Memecoins were more mixed, with
Dogecoin
down less than 1% and
Shiba Inu
off 2%.
Write to Jack Denton at [email protected]
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