The global crypto market had a wide range of revival, and the major tokens went up together. The tech-heavy stocks rebounded and drew the investors’ belief back, and that was how the rally started.
The investors became less risk-averse, and that affected the digital assets. The buyers, in this case, were the institutional investors, and they were the ones who, after the market corrections, searched for value, and thus the overall market was lifted by fresh buying.
Crypto market rallied as tech stocks rebounded, boosting investor confidence.
Bitcoin Price Surge Outpaced Others
BTC was the only cryptocurrency to come close to the dot-com bubble with a whopping 5.4% increase in value during the past 24 hours. The rising price of Bitcoin brought it nearly to the point of 91,700 dollars. Ethereum and other large coins also gained, but one of them was as strong as Bitcoin.
The majority of the top 20 also failed to meet the performance of Bitcoin, indicating that once again, the main focus is on the flagship asset. Thus, it implies that the investors may once again be considering Bitcoin as the safest bet among the cryptocurrencies.
What Does The Volatility Drop Show?
The implied volatility index of Bitcoin, BVIV, plunged significantly from the previous week’s 65% to around 50%. This plunge is indicative of a calmer but still optimistic market situation.
So there are fair chances that with the lowering of volatility, investors who were put off by the extreme price fluctuations might be drawn in. The investors’ perception of risk being less could also be a factor that would help in keeping the price of BTC moving up in the long run.
Bitcoin’s BVIV dropped from 65% to 50%, signalling a calmer, optimistic market.
Year-End “Santa Rally” Anticipation Builds
The activity in the derivatives market is in support of the bullish sentiment. The traders set up a bullish call-condor targeting US$100,000 to US$118,000 in the sky. The cost of that position hit a whopping US$6.5 million, pointing to very high hopes for the price to go up even more.
Nevertheless, major call-selling at the US$100,000 strike price could restrict the high volatility, hence, possibly keeping the rally slow. This, perhaps, is the reason that market observers have named this potential upward movement at the end of the year “Santa rally”.
Altcoins Still Mixed Despite Bitcoin Strength
The price of Bitcoin went up quite significantly; however, the altcoins gave a mixed picture. A few tokens were able to show substantial gains. The others either stayed at the same price or, in some cases, even went down.
The general “altcoin-season” metric is still weak, which means that altcoins are not experiencing a complete recovery to the fullest. Most of the traders are doing leveraged futures trades instead of spot buying for low-liquidity altcoins. This cautiousness is a reflection of the uncertainty that still exists in the market for smaller crypto assets.
Bitcoin surged while altcoins showed mixed performance, reflecting market uncertainty.
What Lies Ahead For Crypto Markets?
If, in the case Bitcoin goes on to break through the US$100,000 mark, there is a good chance that altcoins will also be a part of the celebration. A continuous rise could bring back the interest of the general public in the crypto world once again.
On the other hand, if BTC were to lose the gains it has recently made and fall back to the low-US$80,000s, the altcoins, particularly the low-liquidity ones, would suffer from a greater extent of loss. The market analysts are speculating on the situation continuously, whether it will be momentum or a reversal.
Also Read: XRP Price News: Crypto Market Rebounds With Bitcoin Price $89K
FAQs
Q1: Why is Bitcoin leading this recovery now?
A: The main reason for Bitcoin’s leadership is its strong gain of 5.4 %over the last 24 hours, and the consequent improvement of investor sentiment due to the rebound in stock markets and reduction of volatility.
Q2: What does the volatility drop (BVIV 50%) mean for investors?
A: The drop in BVIV to about 50 % means the market is calmer. This lowered risk could entice the more conservative investors to consider entering the Bitcoin market again.
Q3: What is the “Santa rally” and why is it being discussed?
A: The Santa rally is often seen as a possible end-of-year boost for the crypto market. The traders, who are placing bullish call-condor trades between US$100,000 and US$118,000, are demonstrating their confidence in the potential for further gains.
Q4: Are altcoins likely to rally along with Bitcoin?
A: Possibly if Bitcoin breaks above US$100,000 and maintains stability, altcoins might rally too. But if BTC falters, low-liquidity altcoins could underperform sharply.
