Key Points
- Bitcoin’s Implied Volatility (IV) saw a significant increase over the weekend.
- Bearish sentiments dominate the market as Bitcoin’s halving event approaches.
Bitcoin’s Implied Volatility (IV) experienced a notable increase last weekend. This rise in IV suggests that market participants are anticipating increased price fluctuations or ‘turbulence’ in the short term.
Shift in Market Sentiment
An examination of key volatility markers on Bitcoin’s daily chart confirms that the coin is susceptible to significant price swings in either direction. For instance, the gap between the upper and lower bands of Bitcoin’s Bollinger Bands (BB) indicator has expanded. This indicator evaluates market volatility and a coin’s potential price movements.
When the gap between the upper and lower bands of the BB widens, it indicates that the coin’s price is becoming more volatile and may either increase or decrease significantly. The rising volatility is confirmed by Bitcoin’s Bollinger Bandwidth, which is currently in an uptrend.
Bearish Sentiments and The Halving Event
As the volatility increases and the halving event on the 20th of April approaches, bearish sentiments are prevalent in the Bitcoin market. The coin’s Moving Average Convergence Divergence (MACD) indicator shows its MACD line below its signal and zero lines since the 15th of March, indicating a bearish signal.
Furthermore, Bitcoin’s positive directional index (green) is below its negative index (red), showing that the coin’s bear power significantly exceeds its bull power. At the time of writing, Bitcoin’s Relative Strength Index (RSI) and Money Flow Index (MFI) suggest a decline in daily demand, indicating that market participants are selling their coins rather than accumulating more.
