Bounce? Worsening geopolitical tensions between Iran and Israel, which have turned violent in the Middle East, are causing volatility for investors across the board, including crypto markets. How have the markets reacted to the latest event and is the war the only concern for traders?
Strike hit around 9 p.m. Eastern Time, and the markets began to display extreme volatility thereafter. Bitcoin fell for a second time amid growing prospects of a broader conflict, falling more than 6% and briefly falling below key $60,000 support.
Many have held BTC in high regard as a store of value and flight to safety, but last night's price action caused the coin to decouple from precious metals and strongly correlate with more risky assets. broad stocks, like the S&P 500, challenging these perceptions.
Lots on Crypto Twitter declared recent lows as a massive giveaway, predicting that last night's price levels will appear sharply reduced in just a few weeks; Risk asset prices indeed rebounded yesterday, gaining almost 10% from the lows after the immediate dangers of further escalation eased.
Prices continued their upward trajectory until shortly after the US stock markets opened for cash, before continuing to decline throughout the US trading session.
While the Fear and Greed Index If the situation currently borders on extreme fear, volatility remains contained on the markets. Despite yesterday's move that places the S&P 500 tied for the fifth-longest streak of negative 1-day returns, realized volatility has been noticeably absent.
Yesterday tied for the 5th longest streak of negative 1-day SPX returns. But where is the theft?
For all days with >=4 consecutive negative returns (17), this is the third lowest realized volatility.
Best periods:
1) February 2020 (6 days)
2) October and September 2022, July 2019 (5 days) pic.twitter.com/s1cbQ2FeqZ– SpotGamma (@spotgamma) April 19, 2024
The VIX (a measure of the volatility of options on the S&P 500) managed to briefly rise above $20 last night, but has yet to break through that key resistance level as cash markets open.
Technically, the markets are heavily oversold, and if volatility continues to be contained, it is very likely that the markets will continue to rebound from here. However, the possibility that volatility will ease soon and drag markets lower poses a major risk for the bulls.
Popular cryptocurrency trader Ansem is retaining his bullish outlook for now, but admitted that a convincing loss of BTC's $60,000 support level would lead him to reassess this bias.
most important level on the chart, I'm betting on consolidation -> false distribution -> rising rather than distribution at previous all-time highs like late 2021 and SOL confluence with daily and weekly S/R retests
if we convincingly lose the 58k-61k zone, I would change the bullish bias https://t.co/UahrE1aGVe pic.twitter.com/HYeHLWg4om
-Ansem 🐂🀄️ (@blknoiz06) April 19, 2024