Bitcoin returned above $43,000 on Thursday and was up about 3%, indicating renewed buying interest after a relatively quiet week. Despite the recent decline in trading activity, analysts are still monitoring macroeconomic and regulatory risks that could trigger a rise in volatility.
On Thursday, Russia's central bank suggested that lawmakers need to implement regulations to effectively ban domestic crypto-related activities. The bank made it clear, however, that is not suggesting banning ownership of crypto by private citizens. Instead, the proposal targets Russian institutional investors, financial infrastructure providers and other organizations that could facilitate crypto transactions.
The proposal comes after Binance, a crypto exchange, announced earlier this month that it hired former government officials from Russia and Ukraine to help develop its business in those countries.
Some traders appeared to be unfazed by Russia's proposed crypto ban, evidenced by the price gain on Thursday.
However, some analysts remain cautious despite the stabilization in bitcoin's price. "Buying on declines below $41K BTC is not yet a cause for optimism, as a downtrend with lower highs has been underway for more than a week," Alex Kuptsikevich, analyst at FxPro wrote in an email to CoinDesk.
●Bitcoin (BTC): $42615, +2.26%
●Ether (ETH): $3189, +2.43%
●S&P 500 daily close: $4483, −1.10%
●Gold: $1839 per troy ounce, −0.24%
●Ten-year Treasury yield daily close: 1.83%
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.
Volatility in the crypto market has been declining over the past month, especially as bitcoin continues to trade in a tight range between $40,000 and $45,000.
QCP Capital, a Singapore-based crypto trading firm, described volatility conditions as "frustrating" in a Telegram announcement. "There is clearly some downside nervousness with risk reversals back to very negative levels (puts more expensive than calls)," QCP wrote.
The chart below shows bitcoin's realized volatilities approaching lows around 30% and 40%, which makes it difficult for some option traders who rely on frequent price swings. QCP stated that it has neutralized some of its volatility positions.
For now, some traders have been monitoring the close relationship between bitcoin and the Nasdaq 100 Index. Increased volatility in tech stocks could dictate movements in crypto prices over the short term.
- An EOS renaissance: The community behind EOS is looking to right itself by renewing tech ties with the network’s original developer, Dan Larimer, who has engineered a “Mandel” hard break from the company that insiders say “burned” its $4 billion blockchain darling. Larimer, who quit Block.one – EOS’ now-estranged mother company – last January, is ratcheting up technical contributions to the software he spearheaded in 2017. Read more here.
- Solana NFT boom: Non-fungible token (NFT) sales on the Solana blockchain surpassed $1 billion in total volume this month for the first time. Some developers prefer Solana-based NFTs due the lower transaction fees on the blockchain network compared to Ethereum. Solana’s SOL token is down about 20% so far this year compared to a 14% drop in ETH over the same period. Read more here.
- Prada, Adidas launch NFT project on Polygon: Italian luxury fashion house Prada and sportswear giant Adidas, which recently ventured into the metaverse, have joined forces to launch a new non-fungible token (NFT) project built on the Polygon network. The project will allow fans to contribute their own designs.
Most digital assets in the CoinDesk 20 ended the day higher.
Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.
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