Bitcoin (BTC) has been down roughly 5% over the past 24 hours and remains below the key $100,000 price level — trading at $99,692.42 as of press time.
Recent studies have shown that the number of people who are obese has increased. “Bitfinex Alpha”As volatility decreases, BTC’s price is at risk for consolidation.
Bitcoin was affected by a stock market sell-off on Jan. 27 due to fears of declining profits in AI investments. This suggests that BTC may be a good investment at the moment.
Consolidation amid falling volatility
Bitcoin’s implied volatility (IV) has dropped over 13% since its Jan. 20 peak of $109,590, signaling a shift in market sentiment.
The reduced IV indicates that traders are preparing for consolidation and do not perceive as much risk. Bitcoin is trading within a narrower range. The stabilization comes after a spike in capital inflows, which peaked when Bitcoin crossed the $100,000 threshold. However, these inflows are now tapering off.
As a result, profit-taking activities have also reduced. This has caused fewer pressures on the sell-side as well as a reduction in the requirement for new capital.
The market’s realized cap, a measure of the cumulative cost basis of all Bitcoin holders, has reached an all-time high of $832 billion, growing at a steady rate of $38.6 billion per month. It is a sign of a mature market, although it may also indicate a plateau near-term.
Outpaced by the S&P 500
The 30-day rolling Pearson correlation between BTC, the S&P 500, and the NASDAQ is strong, reaching 0.7 out of 0 to 1. Bitcoin is also benefiting from the recent rally in equities on positive macroeconomic development. The cryptocurrency has reached an all-time record.
Bitcoin also falls along with the other risky assets due to this correlation. While BTC has struggled to sustain a climb above its previous all-time high of $108,100, the S&P 500 has surged to a record high of 6,118.71 points, driven by investor optimism, strong corporate earnings, and policy announcements under the new administration.
The interplay between Bitcoin and traditional equities suggests BTC’s trajectory will remain closely tied to broader macroeconomic trends. This alignment provides opportunities for Bitcoin during rallies but also puts it at risk from a downturn in the equities market.
The trend could change quickly if there is a sudden shift in the risk-taking sentiment triggered by data from economics, geopolitics, or regulation announcements. Meanwhile, Bitcoin traders are closely watching macroeconomic indicators and market catalysts.
It was noted in the report that whether or not it could maintain its current peak, as well as face further consolidation, depends on equities’ trajectory, liquidity conditions and speculative demands.
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