In the first week of October, Bitcoin's volatility has witnessed a significant surge, surpassing its 200-day average, according to the Bitfinex Alpha report published on Monday. The report suggests that this trend mirrors historical patterns where fluctuations in major equity indices precede those in other risk assets like Bitcoin and could persist throughout the month.
The report drew attention to isolated instances of high volatility, such as the over 340% surge in 24-hour volatility on October 2. A similar trend is observable in the Bitcoin options market, where implied volatility has broken historical records, reflecting increases in U.S equities.
Luke Nolan from CoinShares highlighted the forthcoming U.S inflation reading as another potential catalyst for market volatility. This comes at a time when oil prices are on the rise following a Hamas attack in Israel, posing a potential challenge to the Federal Reserve's 2% inflation target.
Despite these fluctuations, the balance between short and long-term Bitcoin holders has managed to keep its price above $27,000. This equilibrium may play a crucial role in maintaining stability amidst increased market volatility.
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