Bitcoin anticipates an off-risk phase, warns Daniel Muvdi

Source: Criptonoticias Original Title: Bitcoin anticipates an off-risk phase, warns Daniel Muvdi Original Link: https://www.criptonoticias.com/mercados/bitcoin-anticipa-fase-riesgo-off-daniel-muvdi/ In a moment of high volatility in cryptocurrencies, Daniel Muvdi, head of markets at Quantfury, explained in a recent interview the elements that are impacting the ecosystem and how bitcoin (BTC) may be signaling a downturn for risk markets.

The market anticipating a risk-off period

For Muvdi, the cryptocurrency market could be anticipating what is known as a risk off period, that is, a phase in which investors avoid risk assets.

According to the analyst, there is a lot of uncertainty right now in the market and the risks are becoming increasingly apparent. In his judgment, there is an excess of optimism about artificial intelligence, which is creating a bubble and has generated much of the bullish narrative:

Seeing that fractures may come, what is called risk off is coming. What we are seeing is that we could see a risk exit. Now, what does this mean for bitcoin? In my opinion, bitcoin is acting as a leading indicator of what this risk exit could be.

Muvdi emphasized that if the risk off occurs, that is, if we are going to exit risk, it could look for bitcoin even at lower amounts.

The FED and the uncertainty of interest rates

One of the factors that puts the most pressure on the market is the upcoming meeting of the Federal Reserve of the United States (FED) scheduled for December 10. In light of this event, Muvdi points out that the expectation of a possible rate cut has changed recently, increasing uncertainty:

The FED had almost a guaranteed consensus that they were going to cut rates, but now 60% believe it will not happen. Since a cut was priced in for December 10 and it does not occur, that generates problems.

This change in expectations directly affects liquidity and selling pressure in cryptocurrencies, especially in bitcoin.

Bitcoin ETFs as Sales Catalysts

Another key point that Muvdi highlighted is the role of ( bitcoin ETFs) as sales catalysts in risk-off scenarios:

I mentioned in my studies that this is like a double-edged sword, because in a risk-off scenario, ETFs will be sold off aggressively. For example, one trillion dollars moved in a single day in IBIT, the BlackRock ETF, and 3.5 trillion dollars have flowed out of ETFs. This creates a strong impact on sales towards exchanges, increasing pressure in the market.

This phenomenon demonstrates how traditional investment instruments can amplify the volatility of crypto assets in times of uncertainty, according to the specialist. Muvdi also mentioned that external decisions, such as the repatriation of Japanese capital, could intensify the pressure on risk assets.

Bitcoin as a risk asset vs. safe haven

Similarly, the analyst considered that, although bitcoin has characteristics that could make it a safe haven in the future, it currently continues to behave like a high-risk asset:

I believe it has not yet been a safe haven asset at any point, although it has all the potential to be one, due to its scarcity characteristics and other factors that make it an excellent candidate. But right now it is more experimental, in my opinion. People still need that adoption to achieve this balance that will lead it to become a safe haven as such.