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Bitcoin experienced minimal fluctuations on Monday as volatility increased and cryptocurrency stocks faced continued pressure prior to the U.S. market opening.
crypto stock slide in pre-market trading Joa70/Pixabay)
Key points to note:
- Bitcoin increased by 1% to approximately $77,000 following a significant selloff over the weekend, with these gains aligned with a decline in the U.S. dollar and a rise in implied volatility.
- Risk assets remained under strain, with measures of volatility surging and crypto-related stocks, including Strategy, Galaxy, and Coinbase, continuing their losses in pre-market trading.
U.S. equities related to cryptocurrencies declined in pre-market trading as market participants continued to react to President Donald Trump’s Friday announcement of Kevin Warsh as his nominee for Federal Reserve chair, which led to a pronounced selloff in crypto over the weekend.
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Strategy (MSTR), the largest publicly traded holder of bitcoin, saw a drop of over 6%, while Galaxy Digital (GLXY) fell by more than 7%. Bitcoin mining and AI-linked firms also faced declines, with IREN (IREN) and Cipher Mining (CIFR) both losing about 4%. The cryptocurrency exchange Coinbase (COIN) also dropped by around 4%.
Volatility is on the rise, with the Volatility S&P 500 Index (VIX) increasing by 10% for the day. The Volmex implied volatility index has surged over the past week, climbing from 40 to 50. Implied volatility indicates the market’s expectations regarding future price fluctuations, where higher levels suggest that traders are anticipating greater uncertainty and larger movements ahead.
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Bitcoin has risen about 1% today, trading close to $77,000 after dipping as low as $74,500 on Saturday. Precious metals are still under pressure, with gold declining 4% to $4,700 per ounce and silver also slipping 4% to $82 per ounce. Oil prices are down as well, with West Texas Intermediate futures decreasing 5% to $62 a barrel.
In contrast, U.S. equity index futures have slightly recovered, with the Invesco QQQ ETF (QQQ), which tracks the Nasdaq 100 Index, down by less than 1% in pre-market trading.
The DXY index, which evaluates the dollar’s strength against a selection of major currencies, has slightly retreated to 97. CoinDesk Research observed that bitcoin and the DXY exhibited a clear inverse relationship last week. Once again, as the dollar weakens, bitcoin is trending upward.
