Bitcoin’s Volatility Returns After Hitting Highest Since July

Bitcoin has climbed above $67,000 for the first time in over two months, but the cryptocurrency market has experienced significant volatility, causing challenges for traders as the US elections draw near.

Chris Newhouse, research director at Cumberland Labs, commented, “A blend of market dynamics and political factors has sparked a powerful combination of short squeezes, speculative interest, and new capital inflows, propelling Bitcoin to recent highs not seen since July.”

On Tuesday, Bitcoin rose by as much as 3% to reach $67,878, before fluctuating between gains and losses in New York trading.

Fadi Aboualfa, head of research at crypto custodian Copper Technologies Ltd., noted, “Markets have been relatively flat since the cryptocurrency hit its all-time high in March.” He added that the industry’s Fear and Greed Index describes 2024 as the most greedy year on record for Bitcoin traders, suggesting that a market cooldown is to be expected.

Data from Bloomberg shows that Bitcoin was stable within a 5% range for 34 consecutive sessions leading up to Thursday, marking one of the longest periods of such stability in a year. This has disappointed many in the crypto community, as October has historically been a strong month for the asset class, earning it the nickname “Uptober.”

Last week saw a notable increase in Bitcoin futures and perpetual contracts, with open interest rising by approximately 33,000 Bitcoin (around $2.1 billion), according to ETC Group. The firm reported that futures open interest has reached an all-time high in US dollar terms.

Vetle Lunde, head of research at K33 Research, observed, “Current price movements and market trends closely resemble those from a year ago when CME activity picked up in mid-October.” He noted that futures premiums on the CME have surged to five-month highs, indicating robust institutional demand for cryptocurrency exposure.