Crypto market volatility remained low ahead of the US presidential election as investors adopted a cautious, wait-and-see approach, according to the latest edition of the “Bitfinex Alpha” report.
Bitcoin’s (BTC) implied volatility in the options market hovered around the low 40% range, reflecting restrained confidence in major price shifts and signaling cautious sentiment among traders.
Despite this conservative outlook, the report projected a potential surge in volatility between Nov. 5 and Nov. 8, indicating the possibility of sharp price movements during election week. Without a clear directional trend, this shift may result in reactive trading rather than a decisive market movement.
The report also suggested that recent corrections in Bitcoin and altcoin prices reflect underlying concerns. Additionally, the pending approval of options on spot Bitcoin exchange-traded funds (ETFs) adds to the market’s complexity and could serve as a catalyst for future movements.
A sentiment shift tied to ETF news could drive adjustments in trading activity, particularly in Bitcoin, where open interest remains near record highs
‘Alt season’ needs a catalyst
The report highlighted that Bitcoin’s dominance reached a cycle high of 60.62%, driven by investor preference for established assets over altcoins.
The altcoin market has seen a significant downturn since March, with tokens outside the top 10 losing 45% of their value, now collectively valued at $200 billion.
With altcoin funding rates stabilizing and speculative interest remaining low, Bitfinex analysts suggested that altcoins may continue to underperform Bitcoin in the near term. This cooling of speculative enthusiasm suggests a subdued outlook for the broader crypto market, barring the emergence of a major catalyst.
Bitfinex emphasized that Bitcoin may continue to outperform altcoins, especially in the absence of immediate positive drivers for smaller tokens.