China’s Stock Rally Takes a Toll on its Crypto Market

According to Kaiko Research, Chinese crypto investors are selling their digital assets to take advantage of rising equity prices. The analysis platform reported on X that the Chinese stock market is experiencing its highest volatility in nearly a decade.

China’s stock market is experiencing its highest volatility in nearly a decade.

The $CSI 300 index notched its highest annualized 60-day volatility since 2016 last week. Bringing it close to levels more typically associated with $BTC pic.twitter.com/NtCmRgAXcc

— Kaiko (@KaikoData) October 17, 2024

Kaiko noted that the CSI 300 index reached its highest annualized 60-day volatility since 2016 last week, reaching levels comparable to Bitcoin. A comparison of BTC and the CSI shows their volatility values converging, with Bitcoin’s volatility declining as the CSI’s rises.

Meanwhile, a more detailed analysis by Kaiko reveals a concentration of trading volume during Asia-Pacific (APAC) trading hours, suggesting that Asia-based traders are leading the crypto liquidations.

Relating Kaiko’s observation to the BTC’s price behavior provides a clearer view of the relative lack of volatility Bitcoin experienced last week. The cryptocurrency opened and closed trading at $62,831 and $62,849 respectively, during the week under review. However, BTC experienced minor movements in both the upward and downward direction, recording a weekly low of $58,867 and a high of $64,444, according to data from TradingView.

Bitcoin’s situation changed in the new week, with the flagship crypto experiencing increased volatility. BTC surged 9.41%, reaching a weekly high of $68,388, which provided a profit-taking opportunity for intraday traders, whose activities led to the crypto’s slight pullback. As of writing, Bitcoin traded for $66,895, reflecting a 2.17% decline from the week’s high.

Meanwhile, Kaiko recounted two other events that occurred within the crypto sector in the past week, both of which played roles in the crypto market’s behavior. The SEC charged Cumberland, a crypto liquidity provider, with operating as an unregistered broker-dealer. The commission also worked with the Department of Justice (DOJ) to take action against companies and individuals allegedly involved in wash trading.

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