Bitcoin Volatility Decrease Significantly After Spot ETF Is Approved
Bitcoin's Market Dynamics
Bitcoin, the leading cryptocurrency, has experienced a notable shift in volatility, reaching lower levels recently. This change is important for investors and traders to consider in their strategies.
Three Key Takeaways
- Low Volatility in Bitcoin: The recent decrease in Bitcoin's volatility is a critical factor for market strategies.
- Mixed Sentiment in El Salvador: Bitcoin adoption shows varying levels of usage, impacting Salvadoran economic perspectives.
- Technical Indicators Favor Bulls: Despite low volatility, a majority of indicators lean towards a bullish sentiment.
Crypto Industry Overview
According to an annual study conducted by Central American University the BTC adoption in going well. It turns out that in 2023, as many as 12% of the population used bitcoin at least once to pay for goods and services.
How does El Salvador use BTC?
The study was conducted in December 2023. 1,280 respondents were asked about their use of BTC and were visited in their own homes. What results were obtained? First, the bad news. The majority of people who bought something with Bitcoin last year used the cryptocurrency for purchases no more than three times (49.7%). For some reason, they did not use BTC for subsequent transactions. On the other hand, as many as 20% used BTC ten or more times.
What was bought with bitcoins? Mainly food products (22.9%). In second place were daily purchases at the supermarket (20.9%). BTC was also willingly paid for veterinary services (15%), although dogecoin would certainly be more useful in this field.
So, as you can see, Salvadorans pay BTC, but probably not as often as the government would like. The study also shows that the overall number of consumers using cryptocurrency has decreased. A study conducted in 2022 at the same university showed that 24.4% of the population used BTC at that time. In 2023 as many as 12% of the population used bitcoin at least once to pay for goods and services.
Bitcoin has improved the lives of Salvadorans
There has been a significant increase in the number of people who believe that their family's life has improved over the past year thanks to bitcoin becoming legal tender in their country. In this field, we have a jump from 3% in 2022 to 6.8% in 2023. 34.3% of people believe that the overall economic situation has improved. The largest group, however, points not to the government's pro-Bitcoin policy, but to the government's fight against crime (24.3%).
Technical Market Outlook
BTC/USD has seen a new yearly high at $49,126, followed by a swift reversal, indicating volatility. The local low reached $41,432, with a rebound to $43,336. Despite multiple bounces from trend line support, volatility remained low, with a maximum daily change of 2%.
Key levels to watch:
- Intraday Resistance: $43,567
- Intraday Support: $42,034
- Bullish Outlook Change: A breakout above $46,000
H4 Time Frame Analysis
The H4 chart shows weak and negative momentum, supporting a short-term bearish outlook for Bitcoin. A sustained move above $46,000 would be needed to shift this perspective to a more bullish stance.
Intraday 1H Indicator Signals
Current indicators show:
- Majority Buy signals from technical indicators
- Predominance of Buy signals from moving averages
Market Sentiment
The sentiment is generally bullish but shows a decrease in bullishness among Bitcoin traders.
Monthly Pivot Points
Pivot Points for BTC/USD:
- Highest Resistance (WR3): $60,342
- Middle Resistance (WR2): $52,233
- Lower Support (WS1): $39,312
- Lowest Support (WS3): $27,908
Conclusion
For bullish traders, it's important to monitor for a potential breakout above $46,000. Bearish traders should consider the current low volatility and weak momentum, which might favor short-term bearish strategies.
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Important Notice
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
