The landscape is specially bad for altcoins, which need a catalyst to spark interest and propel a potential 'alt season.'
Investors in the crypto market are treading cautiously as they await the outcome of the US presidential election, resulting in low volatility, according to the latest edition of the “Bitfinex Alpha” report. Bitcoin's implied volatility has remained around 40%, signaling a lack of confidence in significant price movements. However, the report suggests that this could change between November 5th and 8th, potentially leading to sharp price shifts during election week. While the market lacks a clear trend, this volatility may result in reactive trading rather than a decisive market movement.
Recent Corrections Reflect Underlying Concerns
The recent corrections in Bitcoin and altcoin prices are seen as a reflection of underlying concerns in the market. The pending approval of options on spot Bitcoin exchange-traded funds (ETFs) adds further complexity to the market and could serve as a catalyst for future movements. If there is a sentiment shift tied to ETF news, it could drive adjustments in trading activity, particularly in Bitcoin, where open interest remains near record highs.
Alt Season Needs a Catalyst
Bitcoin's dominance in the market has reached a cycle high of 60.62%, driven by investors' preference for established assets over altcoins. Altcoins have seen a significant downturn since March, with tokens outside the top 10 losing 45% of their value and now collectively valued at $200 billion. With altcoin funding rates stabilizing and speculative interest remaining low, Bitfinex analysts suggest that altcoins may continue to underperform Bitcoin in the near term. This subdued outlook for the broader crypto market is expected to persist unless a major catalyst emerges.
Bitcoin Continues to Outperform Altcoins
Bitfinex emphasizes that Bitcoin may continue to outperform altcoins, especially in the absence of immediate positive drivers for smaller tokens. As investors remain cautious and uncertainty looms over the market, Bitcoin's established position and perceived stability make it a more attractive option. The lack of positive catalysts for altcoins further reinforces the preference for Bitcoin. Until a significant catalyst emerges, Bitcoin is expected to maintain its dominance and outperform the broader crypto market.
Conclusion
The crypto market's volatility has remained low as investors adopt a wait-and-see approach ahead of the US presidential election. Bitcoin's implied volatility suggests a lack of confidence in major price shifts, but the Bitfinex Alpha report points to a potential surge in volatility during election week. Recent corrections in Bitcoin and altcoin prices reflect underlying concerns, while the pending approval of options on spot Bitcoin ETFs adds further complexity to the market. Altcoins may continue to underperform Bitcoin unless a major catalyst emerges. In the absence of immediate positive drivers for altcoins, Bitcoin is expected to maintain its dominance and outperform the broader crypto market.