Has the crypto market reached its low point? Investors are wondering this since Bitcoin, the most popular cryptocurrency, increased by more than 6% during the past week, passing the psychological $20,000 level, and because technical indicators imply that Bitcoin has passed its lowest point in recent months. Particularly the options market suggests that investors may not see a prolonged decline.
Positive Attitudes May Increase Confidence
According to recent statistics, the long- and short-term skew metrics, which determine the implied volatility of two puts and calls, have both achieved zero. The lesser demand for options often indicates that traders are not bearish on an asset. It is equal for both puts (a right to sell and a bearish position) and calls (a right to buy and a bullish position) when it is zero.
Following this year's gloomy market, neutral sentiment could increase confidence by indicating that bears do not anticipate the asset to continue decreasing in value. Investors who weathered a protracted period at the $20,000 level would find it to be a relief.
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Reduced Correlation with the Nasdaq
The 30-day correlation between Bitcoin and Nasdaq has also decreased, falling to 0.26, the lowest level since January. That gives rise to the possibility that cryptocurrencies can sever their connection to stocks and persuade investors that they are worthwhile as a hedge. Furthermore, the Federal Reserve's indication that it may limit the rate of rate increases this year may be tied to the increase in Bitcoin's price.
The conclusion
The upbeat mood coincides with the 14th anniversary of Satoshi Nakamoto's publication of the Bitcoin whitepaper 4. By midday New York time, one bitcoin was worth approximately $20,411.
Thanks for reading: As the Skew Indicator reaches zero, market sentiment toward bitcoin is neutral, Sorry, my English is bad:)