Analysts Expect More Volatility Before Calm as Bitcoin Tests $66K

Although Bitcoin is turbulent, market calm is expected soon. QCP Capital thinks traders are pricing out an ether ETF soon. Market observers anticipate further volatility ahead for Bitcoin {{BTC}}, which tested $66,000 during Asian trading hours on Friday.

Bitcoin remains volatile with the 10% drawdown we saw this week, driven by spot bitcoin ETF outflows from GBTC of about 300mm on March 20," Semir Gabeljic, Pythagoras Investments Director of Capital Formation, said in an email interview.

The drawdown is still within the projected 10-20% range, as we've witnessed before the BTC halving event. More volatility is predicted before the BTC halving, he said. CoinDesk's Digitization Index (DTZ), which tracks digitization protocols like Ethereum Name Service (ENS), rose 2.7% during Asia trade hours.

After last weekend's pre-FOMC volatility, Singapore-based QCP Capital stated Friday morning Asia time that bitcoin and ether are consolidating in a “relatively tight range” and that the market “might take a break this weekend”.

The trading business also reported $358.8 million in withdrawals from the Grayscale Bitcoin Trust (GBTC). QCP predicts BTC spot ETF net outflows for a fourth day.

QCP warns that the market is assessing the likelihood of a spot ether ETF approval for ether {{ETH}}. “The Grayscale ETH discount has widened from -8% to -20% over the past two weeks,” QCP said. Prediction markets reflect this. On Polymarket, a contract asking if an Ethereum ETF would be approved by May 31 has a 21% chance.

Fortune reports that the SEC is investigating the Ethereum Foundation. However, the SEC has not responded to FOIA requests for important papers that might clarify its position on ether as a security.

Polymarket blockchain bettors anticipate ether will attain its all-time high in the second quarter, while many traders also think 2024 will not see an all-time high. CoinDesk Indices shows Ether trading above $3500, up 1.2%.

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