“My job is making windows where there were once walls.” – Michel Foucault ||
Hi all! Like I said yesterday, today’s note is really short since I’m not at my desk, and I’m afraid there’s no recording. Looking forward to getting back to normal tomorrow!
IN THIS NEWSLETTER:
Welcome to volatility
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WHAT I’M WATCHING:
Welcome to volatility
The past 24 hours have been quite something. After briefly breaking through to a new all-time high of $69,210, BTC started dropping, reaching as low as $59,313 before heading back up again. Quite the round trip – an intra-day drop of over 14% is not something you see every day.
When I started typing this morning, BTC had recovered to back above its level at this time yesterday, before it began its breathless push to a new ATH. But then it started dropping again, then recovered a bit, and this could be the new normal – which is actually not a bad thing at all.
(chart via TradingView)
One way to appreciate the wild price springs is as a fitting initiation for all the new ETF investors: now they know just how volatile BTC can be. I don’t mean to sound glib – hopefully, they were all warned this could happen, but even so, it was probably startling to many and unfortunately perhaps devastating to a few. If yesterday’s moves permanently scared away many who do not want this kind of action in their portfolios, then that is good news for them and for the market. The damage could have been worse had the price run up further and faster, bringing in even more retail participants convinced the only risk was in missing out.
The historical BTC volatility index that I keep an eye on, BVOL (30-day rolling annualized), hasn’t been this high since almost a year ago. This hopefully serves as a reminder that these kind of swings are not abnormal in crypto markets – it’s just it’s been a while.
(chart via TradingView)
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