Bitcoin’s markets are in turmoil this morning after the flagship cryptocurrency took a nearly 3% nosedive, shedding roughly $3,400 in value to land at a price just shy of $110,000. This slide has dragged down the broader crypto market, with Ethereum and other major tokens also feeling the squeeze. Yet, this isn’t just a typical market oscillation—Bitcoin’s volatility metrics are awakening from a slumber, signaling potential turbulence ahead. For more on the recent market downturn, see Crypto Markets Lose $200 Billion as Bitcoin’s Price Tumbled to 6-Week Low.
Volatility Indicators Flash Warnings
In recent weeks, Bitcoin’s volatility had been languishing at multiyear lows, a period of calm that now appears to be over. The 30-day implied volatility, as tracked by Volmex’s BVIV and Deribit’s DVOL indices, has surged past the 100-day simple moving average for the first time since June. This shift hints at a possible increase in market swings, just as analysts had speculated might occur as summer turned to fall.
Michael Kramer of Mott Capital Management suggests that this volatility could be a harbinger for Wall Street, where the VIX, often referred to as the “fear index,” is inversely correlated with stock prices. “Market liquidity pressures are mounting as reserve balances decline and large Treasury settlements approach, leaving equities vulnerable despite lower volatility,” Kramer explained in a recent market update.
Eyes on the PCE Inflation Data
All eyes are on the U.S. core Personal Consumption Expenditures (PCE) report, set to be released today. This data is expected to play a crucial role in shaping the Federal Reserve’s approach to future interest rate decisions. Analysts from Bitunix noted, “This PCE release will shape the Fed’s future easing path rather than the September decision itself. If data comes in at or below expectations, risk sentiment can hold; but if significantly hotter, the Fed’s forward guidance may shift toward a ‘one-and-wait’ stance.”
Crypto enthusiasts are particularly focused on Ethereum, which has been attracting attention due to significant ETF inflows. This week, U.S.-listed ETH ETFs saw a net inflow of over $1 billion, nearly doubling the $567 million that flowed into Bitcoin ETFs. A soft PCE could see Ethereum outperform as traders pivot toward its native token.
Historical Context and Market Dynamics
Historically, Bitcoin has been a bellwether for broader market sentiment, and its volatility often serves as an indicator for traditional financial markets. The recent uptick in Bitcoin’s volatility could signal a similar rise in the VIX, suggesting traders might brace for a bumpy ride on Wall Street. For additional insights on Bitcoin’s recent price movements, refer to Bitcoin Tumbles Back Below $110K as Crypto Bounce Fails, Ether Plunges 8%.
Meanwhile, the spread between the U.S. 10- and two-year Treasury yields has reached its highest point since September 2022. This curve steepening is bolstering bullish sentiment in both gold and Bitcoin, as investors seek safe havens amid market uncertainties.
What’s Next?
The crypto market is at a crossroads. With Bitcoin’s volatility on the rise and crucial economic data about to be unveiled, traders are left pondering the future. Will the Fed adjust its monetary policy in response to the PCE data, and how will that impact market sentiment? The answers are not yet clear, but these developments could set the tone for crypto markets in the coming months.
As traders navigate this volatile landscape, they should keep an eye on the broader economic indicators and regulatory developments that continue to shape the cryptocurrency ecosystem. The interplay between these factors will likely determine whether this volatility marks the beginning of a prolonged market shift or merely a temporary blip in Bitcoin’s storied history.
Source
This article is based on: Bitcoin Volatility Comes Alive Ahead of PCE Inflation Data: Crypto Daybook Americas
Further Reading
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- Altcoins Continue to Bleed Out as Bitcoin Fights to Maintain $110K: Market Watch
- Bitcoin Reverses Powell Spike With a Flash Crash as Options Market Signals Jitters Ahead
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
