Crypto markets may see a spike in volatility

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Crypto markets may see a spike in volatility

Crypto markets could soon experience volatility, leading to a rise in volatility.

Cryptocurrency exchange Bitfinex said activity in the options markets foreshadowed moves in crypto this week.

The report also found that options' implied volatility is currently at 36.4%, while historical volatility is 27.1%.

Bitcoin is up 3.5% to $28,000 over the past 24 hours and has surged 64% in the past seven days.

The Federal Reserve halted interest rate increases last month, leaving them at a range of 5.25% and 5.50%.

The Fed also made a'significant and unusually large' shift in its interest rate outlook, said Mohamed El-Erian, chief economic advisor at PIMCO's parent company Allianz and president of Queen's College Oxford.

The policymaker's projected interest rate levels jumped to 5.1% in September from 4.6% in June - suggesting the possibility of two ratecuts next year is off the table.

Coinbase research forecast volatility in Bitcoin and equities would likely increase due to higher-than-expected inflation data.

The prospect of higher volatility has been reflected in the stock market's performance lately. On Monday, the VIX, which tracks the expected volatility and investor sentiment, moved up above 18 from below 16 on Friday.

Adam Morgan McCarthy, a London-based market Correspondent of DL News, is a freelance journalist. DL News' Markets Correspondent is Thomas Carreras.