The Volatility Times
Following the recent price rallies in BTC, ETH, and most of the major altcoins, there seems to be an increased optimism on where we are today in crypto markets. Last Saturday, the CVI — which measures the crypto markets’ sentiment on future volatility, reached its lowest 1-month value (72.5). While it’s still early to forecast the direction of the crypto markets in the coming months, there does appear to be an increasing bullish sentiment following the recent breakouts of BTC & altcoins.
Whatever the case, this market cycle offers a unique window for investors to filter through the noise and highlight investment opportunities with longer-term utility. Benchmarking or gauging future volatility sentiment through the CVI & ETHVI equips investors with the right tools for downside protection and will ensure efficient profit maximization. There is some light at the end of the tunnel, but investors need the right tools to negate any short-term price fluctuations.
This week’s takeaways:
- The crypto volatility index ÐVI both reached their 1-month low on Saturday, March 19th, 2022
- Both the CVI & ETHVI have been on a downward trend since March 15th, 2022
- BTC and most of the altcoins have seen some upward trajectories this week
The past few weeks have been filled with lots of crypto market activity. Most importantly, crypto has gained lots of new ground across lots of institutional and government agencies, following its recent use in crowdfunding efforts. Looking through the charts, BTC has also increased some of its momentum and is fast approaching its March 2nd, 2022 1-month peak.
Ethereum on the other hand recently crossed the $3,000 mark after more than a month below this value. While it is barely above $3,000, it has outperformed BTC on a month-to-month basis by about 4%, while remaining flat across the broader DeFi ecosystem.
Looking through the CVI Index, we see an 18% drop from its 1-month peak of 90 to its current value of around 73. Assuming no black swan events occur, the CVI appears to be on a tempered trend in the short/mid-term — this sentiment can give investors an indication of what investments make the most sense for their portfolio.
The ETHVI index, which measures the 30-day implied volatility of Ethereum, has also seen a considerable drop in its week-over-week future volatility sentiment.
As the first quarter of the year comes to a close, there is no doubt that 2022 has been filled with lots of unexpected turns of events. Despite all the obstacles, the crypto economy has remained on course by facilitating much needed transactions in a trustless, decentralized, and efficient manner. The charts over the past few months might tell a different story, but crypto assets have exceeded the bounds of traditional finance, and it appears the best is still yet to come.
A few things that have happened this week
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