Bitcoin (BTC) traded with little movement early Tuesday, hovering above $62,000, as heightened volatility in the U.S. bond market and significant losses in Chinese equities affected investor sentiment.
The leading cryptocurrency remained confined within a narrow range, with the Bollinger bandwidth—a technical indicator reflecting market volatility—falling to levels reminiscent of the mid-June downturn. Bollinger bands are calculated using the 20-day simple moving average, placing bands two standard deviations above and below it. A decrease in bandwidth often suggests lower volatility, while an increase may signal a forthcoming price explosion.
At present, Bitcoin’s price is restrained by the 200-day simple moving average (SMA) resistance at $63,550 and the 50-day SMA support at $60,819, showing no immediate signs of a volatility surge.
In parallel, the MOVE index, which gauges expected volatility in U.S. Treasury notes, jumped 24% on Monday, reaching its highest level since early January. Increased volatility in Treasury notes can lead to financial tightening and risk aversion, benefiting the U.S. dollar and potentially applying downward pressure on risk assets like stocks and Bitcoin.
The dollar index is trending upward, as expectations of a dovish Federal Reserve have diminished. ING analysts suggest the index could reach 103 by the end of the month, currently holding steady around 102.45.
Meanwhile, China’s Shanghai Composite Index experienced a sharp decline of 4.6%, breaking a ten-day winning streak, primarily due to disappointment over the government’s lack of new fiscal stimulus measures.
Beijing had previously introduced a range of stimulus initiatives in late September, which fueled a rally that drew capital away from other Asian equity markets and Bitcoin. The ongoing slump in Chinese stocks could reverse this trend, potentially reallocating capital to support other regional indices and cryptocurrency prices.
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