• Bitcoin Volatility Index Hits 6-Week Lows Despite Looming Macro Risk Events
• Bitcoin price is currently in the mid-$27,000s and a barrage of key macro risk events are looming in the coming two weeks.
• Traders should keep an eye on the $27,000 and $28,000 levels as they mark recent intra-day highs and lows.
Bitcoin Volatility Index Drops to 6-Week Lows
The Bitcoin Volatility Index (DVOL) just fell to 52, its lowest level since 8th March 2021. The drop comes despite the Bitcoin price’s pullback from 10-month highs above $31,000 last week. BTC is currently trading in the mid-$27,000s range.
Upcoming Key Macro Risk Events
This week will see the release of the first estimate of US GDP growth for Q1 2021 on Thursday and Core PCE report – a favored monthly inflation gauge – on Friday. Major tech companies such as Amazon, Apple, Microsoft and Google will also be reporting their earnings this week which could affect macro sentiment. Next week will bring us monthly US ISM PMI survey data and jobs data plus a rate decision from the US Federal Reserve which is expected to lift interest rates by 25 bps from 4.75-5.0% to 5.0-4.25%.
Implications of Low Volatility
The drop in volatility expectations suggests that traders/investors view BTC’s recent pullback as making it more likely that prices will consolidate within current ranges rather than continuing with aggressive pushes higher as seen in March when Bitcoin bounced rapidly from below $20k. Alternative measures of volatility according to ATM option pricing are also hovering close to recent lows which supports this idea further.
Important Price Levels To Watch This Week
Traders should watch out for key price levels such as $27k and $28k which mark recent intra day highs and lows respectively along with 50 day moving average at 27120$. Downside support can potentially come from 26500$ area while long term resistance lies around 25200$-400$.
Despite low volatility expectations traders should not discount upcoming macro risk events which can upend markets quickly so it is important to keep an eye on these key price levels for any potential changes or movements in market sentiment