Several altcoins have seen sharp gains in the last week, fueled by a short squeeze. Meanwhile, BTC experiences mild buoyancy in volatility compression as BTC's 5-day volatility falls below that of gold, the DXY, and U.S. equities.
Several altcoins have seen sharp gains in the last week, and we also note a substantial outperformance from ETH and BNB versus BTC as market participants rotate into altcoins amidst a frantic short squeeze. BTC, on the other hand, trades at compressed volatility but has experienced mild upside throughout the week, with seven of the first nine trading days of 2023 closing in the green. BTC is currently more stable than gold, the dollar strength index, Nasdaq, and the S&P 500 gauged through 5-day volatility this is highly unusual, and the current relative volatility compression environment has already lasted for a record-long duration. Apart from the September 29 observation of last year, all other relative volatility compression events have been followed by volatile days with sharp bounces or frantic markets in the following 30 days.
We cover the unusually low volatility in depth in week's edition of "Ahead of the Curve".