Bitcoin experienced a decline to $66,000 on Wednesday, dropping more than 3.5% within a single day. This significant decrease coincides with a spike in short-term volatility on Binance, which has reached levels not observed since 2022, as reported by CryptoQuant.
The retreat in Bitcoin’s price followed unexpectedly strong US employment figures. These figures diminished prospects for aggressive rate cuts from the Federal Reserve, subsequently exerting downward pressure on speculative assets across the market.
Analysis from CryptoQuant reveals that the seven-day annualized volatility on Binance surged to 1.51, marking the highest level in almost three years. This kind of heightened volatility historically correlates with major market restructurings and broader deleveraging across cryptocurrency markets.
What does this volatility mean for investors? Despite the recent turbulence, longer-term metrics indicate that this volatility may not persist. For instance, the 30-day annualized volatility is currently at 0.81, and the 90-day reading has fallen even further to 0.56. This trend suggests that the recent price fluctuations are more about isolated bursts of activity rather than signaling a major change in market conditions.
In addition to Bitcoin, other cryptocurrencies have also seen declines, with Ether dropping to $1,925, Solana falling to approximately $80, and XRP decreasing to $1.35. The overall cryptocurrency market capitalization has declined by 3.8% over the past day, based on CoinGecko data. Meanwhile, major US equity indexes, such as the Nasdaq, showed little change.