Crypto Volatility Index Newsletter — September 24th
The Crypto Volatility Index is presenting a new newsletter covering crypto volatility trends, trading and market analytics.
Application soon to be available via cvi.finance.
Disclaimer: This is for educational purposes only — Nothing here is intended for trading advice or otherwise.
Crypto takes a plunge, but quickly bounces back
All eyes have been on Bitcoin (BTC) this week, as the price of BTC slumped below $40,000 for the first time in six weeks. Data from TradingView shows a steep decline of nearly 16% on September 21, with BTC prices starting out at nearly $47,300 on Tuesday, and then falling to around $39,650 around 9 p.m. UTC. The move marked a 25% retracement from BTC’s recent highs above $50,000 on September 7.
Bulls are now viewing $40,000 BTC as a significant mark for this week’s close. Fortunately, Bitcoin managed to recover to more than $40,000 on September 21, trading just above $43,000 at the time of this writing on Wednesday, September 22.
Unsurprisingly, Bitcoin wasn’t the only crypto to suffer a sharp price drop on September 21. According to data from CoinGecko, 29 of the top 30 crypto assets by market capitalization also faced a 24-hour decline. For instance, Ethereum (ETH) was trading above $3,000 on the morning of September 21, but then took a dip close to $2,700 later that day. Tether (USDT) also took a nosedive, trading just above $1.00, and then slumping below the dollar mark later in the day. Cardano (ADA) was also trading above $2.00 on September 21, but dipped below that mark later that day.
While some traders believe the bear market is here, the Crypto Fear & Greed Index shows that bearish price action is a result of “extreme fear” across the crypto market. The recent crypto price plunges also came after U.S. Securities and Exchange Commision Chair Gary Gensler likened stablecoins to poker chips used in a casino. He emphasized the importance of collaborating with banking regulators and the U.S. Commodity Futures Trading Commission when regulating digital assets.
Although this is the case, there have been multiple instances of dip-buying in response to the current market conditions. Most recently, El Salvador President Nayib Bukele announced that his country is buying the BTC dip, noting a purchase of 150 coins with a value of $6.4 million at the time. Another Bitcoin whale also took advantage of the dip, as this address shows numerous consecutive transfers to a wallet. The total stash now is 111,795 BTC, or more than $4 trillion worth of the digital asset. Given this sentiment, a Cointelegraph article notes that analysts are asserting Bitcoin is poised for a recovery as long as prices hold above local support.
CVI’s next milestones announced as the DeFi space advances
Decentralized finance, or DeFi, has been making moves recently. According to DappRadar, there is more than $100 billion of total value locked in DeFi. Even though some DeFi tokens are losing their appeal, regulators are keeping a close eye on the DeFi space as the industry aims to take over Wall Street. This demonstrates that the DeFi space will witness growth moving forward, potentially overtaking traditional finance in the near future.
As the DeFi space continues to advance, COTI has achieved several milestones to remain competitive within the industry. For instance, we recently launched CVI V2; we’ve integrated Polygon into the platform, along with The Graph and Dune Analytics; CVI is also listed on DeFi Pulse and DappRaddar; and $GOVI is was recently listed on KuCoin, 1inch, and Orion Terminal.
Many of you may now be wondering what’s next for CVI — Here is a brief summary of what we have in store:
- Platform improvements and balancing: Following the release of CVI V2, our dev teams has been working on new features to improve risk metrics for liquidity providers, to enable more frequent trading, and to ensure better profits from short term index movements
- ETHVOL release: Our first volatility token, ETHVOL (USDC-ETH), will soon be traded on Ethereum-based decentralized exchanges (DEXs). This will attract the attention of traders, DEXs and arbitrageurs when there is a difference in prices between the two markets.
- Governance and the launch of GOVI DAO: We will soon be launching the GOVI DAO to provide GOVI token holders with the opportunity to participate in deciding the growth of the CVI platform. The more $GOVI a user holds, the greater that user’s influence will be.
- Impermanent-loss protection system for DEX users: Our planned system allows liquidity providers on DEXs and AMMs to protect themselves from impermanent loss on liquidity pools, when one of the assets becomes volatile.
- Arbitrum Optimistic rollup chain: Ethereum layer 2 solutions are finally reaching full usability. Therefore, we are planning to deploy the CVI platform to the Optimistic Rollup chain Arbitrum. This deployment will allow users to trade volatility with cheaper gas fees compared to the ones currently paid by using layer 1 on the Ethereum mainnet, while still relying on its security.
- Leverage volatility tokens: We will be launching CVI Leveraged volatility tokens soon. This will increase capital efficiency and allow interoperability with other DeFi platforms.
- Cooperation with on-chain data oracles: Moving forward, we are planning to expand new integrations with Oracle protocols. This will help maintain our new volatility tokens peg to their respective index.
- New coins: We are planning to introduce new coins to the platform… stay tuned!
You can read more about CVI’s next milestones here.
Following the Crypto Volatility Index’s “Next Milestones Release” post, COTI CEO Shahaf Bar-Geffen conversed with CVI Software Engineer, Amir Hagafny. They discussed what these milestones mean, their importance for the CVI platform, along with the current developments for the CVI team (including what is planned to be developed and delivered soon).
You can watch their interview here: