Market Deep Dive: Bitcoin and Ethereum consolidation with low volatility

Bitcoin and Ethereum continue to trade within a relatively narrow range.

Presently, BTC is hovering around the lower end of the range, at USD 29,833, with the range itself spanning from USD 29,550 to 30,500. Similarly, ETH is trading at USD 1,894, towards the lower end of its range (USD 1,875 – 1,945).

Implied volatilities for both BTC and ETH remain historically low, with BTC’s ATM implied volatility at 38% (compared to its yearly average of 55%) and ETH’s at 37% (versus a yearly average of 67%).

Desk volume has remained elevated since the Ripple ruling last week, with a bias towards buying activity for both major cryptocurrencies (BTC, ETH) and altcoins. Notably, XRP has seen increased interest from our clients.

During the past week, the crypto market has been in a consolidation phase. Both Bitcoin and Ethereum have experienced declines of around 5-6%, while the top performers from the previous week, namely MATIC and ADA, have seen declines of 10% and 12%, respectively.

Regarding macroeconomic news, there have been limited market-driving updates. Figures from China on Monday were somewhat disappointing, indicating a weaker post-Covid recovery for the world’s second-largest economy. In Europe, inflation data released showed a similar trend to that of the US: overall inflation is cooling slightly, but core inflation remains persistent. Notably, Eurozone core inflation for June exceeded expectations, standing at 0.4% month-over-month.

Recent developments in the Ukraine conflict have garnered increased attention. Moscow’s withdrawal from the agreement allowing Ukraine to export grain, coupled with attacks on the port city of Odesa and threats against civilian ships traveling to Ukraine, have surprised some observers as China, Russia’s most important ally, is the largest importer of Ukrainian grain.

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