Bitcoin [BTC] price is undergoing massive swings at the moment, the high and low recorded yesterday was about $1350 apart. BTC topped just under $7000 during early hours in the west. However, towards the end of the day, it dropped heavily to lows at $565x.
Prominent derivatives and crypto trader, TraderXO, tweeted,
Wild af out there… wew – ill just enjoy watching the charts for now.. Been a solid day not going to over trade
Notice the fluctuation in the price on the hourly chart of Bitcoin on Coinbase. The price drops and recovers more than $500 (from $6200-$5650) in consecutive hours.
The volatility index on Bitcoin is currently at levels not witnessed in the last six years. Even during the 2017 bubble market the volatility was limited around 7.7%. Currently, the volatility is at 10.3%, and has been above 10% since 16th March.
The present price action is Bitcoin is showing characteristics similar to the very early days in the crypto markets. The volatility in price in 2013 went as high as 12-15%.
As reported yesterday on CoinGape, the Open Interest (OI) has been dropping massively on BitMEX. The total open interest on BitMEX at press time is only $367 million. During the bull markets it stayed as high as $1.2 billion for consecutive days.
Moreover, the OI on Huobi and Okex is dropping as well, pointing out that it is not an isolated incident on BitMEX only. The OI on Huobi has dropped more than 4 times since the beginning of the month.
The bulk of the drop was witnessed on 13th, when the panic ensued a 50% drop to $3850.
The relative slow-down at the exchanges, and a $100 billion drop in the total market capitalization of Bitcoin has made the markets susceptible to these wild swings. The whale-sized orders are expected to have larger effect on price now than it it before.
Do you think that the market will stabilize with a bullish or a bearish outlook? Please share your views with us.