October 21, 2024
By Our Correspondent
According to Kaiko Research, Chinese cryptocurrency investors are liquidating their digital assets to capitalize on the increasing prices in the equity market.
The analysis platform reported on X that the Chinese stock market is currently experiencing its highest level of volatility in almost a decade.
The volatility in China’s stock market has reached unprecedented levels, with the $CSI 300 index recording its highest annualized 60-day volatility since 2016 last week, approaching figures typically associated with Bitcoin.
Kaiko highlighted that the CSI 300 index’s annualized 60-day volatility has surged to levels not seen since 2016, aligning closely with Bitcoin’s volatility. A comparative analysis indicates that as the volatility of the CSI rises, Bitcoin’s volatility has been on a decline.
Furthermore, Kaiko’s in-depth analysis indicates a significant concentration of trading volume during Asia-Pacific (APAC) trading hours, implying that traders based in Asia are primarily driving the crypto liquidations. When relating Kaiko’s findings to Bitcoin’s price movements, it becomes evident that Bitcoin experienced relatively low volatility last week.
The cryptocurrency opened at $62,831 and closed at $62,849 during the reviewed week, with minor fluctuations recorded. The weekly low was $58,867, while the high reached $64,444, as per TradingView data.
In the following week, Bitcoin’s situation shifted, with the leading cryptocurrency experiencing heightened volatility. BTC surged by 9.41%, achieving a weekly high of $68,388, which created opportunities for profit-taking among intraday traders, resulting in a slight pullback. At the time of writing, Bitcoin was trading at $66,895, reflecting a 2.17% decrease from the week’s peak.
In the interim, Kaiko detailed two additional incidents that transpired in the cryptocurrency sector over the past week, both of which influenced the dynamics of the crypto market. The Securities and Exchange Commission (SEC) filed charges against Cumberland, a provider of crypto liquidity, for functioning as an unregistered broker-dealer. Furthermore, the commission collaborated with the Department of Justice (DOJ) to initiate actions against entities and individuals purportedly engaged in wash trading.