‘Short-term volatility’ doesn’t dim crypto outlook: 21Shares

The market’s short-lived rally isn’t something to be too worried about, analysts say

article-image

Tony Stock/Shutterstock modified by Blockworks

share


This is a segment from the Empire newsletter. To read full editions, subscribe.


Well, so much for a rebound after last week.

Instead, the market is reacting to a whole new set of issues — ones that aren’t tied to ByBit or North Korean hackers. 

President Donald Trump’s announcement that the US will proceed with 25% tariffs on Canada and Mexico today sent both traditional equities and crypto into a freefall. The overall crypto market cap is now sitting at $2.82 trillion, an 11% decrease over the past day, according to Blockworks Research data. 

Yikes. 

Bitcoin is in the low $80,000’s, a far cry from the $90,000 level we cheerfully retook after President Trump posted about the strategic reserve. 

Over on Derive.xyz, “traders are showing strong demand for high-leverage calls, with 49.4% of BTC premiums and 45.5% of ETH premiums being calls bought. This indicates that traders are seeking upside exposure in the wake of the large price fluctuations.”

This shouldn’t be too surprising if you’ve been following the price action. But “BTC’s 7-day implied volatility jumped from 47% to 70%, and 30-day volatility rose from 47% to 55%,” Dr. Sean Dawson, head of research at Dervive.xyz, noted. Following the rally, the volatility temporarily settled but it’s since spiked again.

Matt Mena, crypto research strategist at 21Shares, told me: “[T]he market reaction reflects renewed fears of inflationary pressures and economic uncertainty, but this selloff appears to be an overreaction. Many investors had anticipated these moves, and as futures markets adjust overnight, we could see stabilization when trading resumes [this morning].”

Yesterday, I thought I had aptly named the PayPal section “green shoots” but it turns out today’s the day with some actual green shoots — at least if you ask Mena. 

“Despite the short-term volatility, the long-term outlook for the crypto sector remains bright. Notably, CME Solana futures are scheduled to begin trading on March 17, a significant milestone that could accelerate the SEC’s approval timeline for Solana spot ETFs,” he added.

Whether or not movement around SOL ETFs reignites a rally remains to be seen. But basing it off of what we’re currently witnessing, I’m a skeptic. 

While folks like Eric Trump encourage people to buy the dips, I take a bit more of a cautious position. There’s nothing wrong with taking advantage of lower prices, but there are a lot of unknowns currently — and no market reacts well to that. 

Loading Tweet..

Don’t believe me? Let’s take a look at some altcoin data from Kaiko. 

Look at that volatility

“A year ago, the top 10 altcoins by market cap accounted for 58% of altcoin volume on U.S. platforms and 50% on offshore exchanges. As of last week, those shares had risen to 77% and 66%, respectively,” Kaiko noted. 

Pantera’s Paul Veradittakit told us yesterday that we could see a potential increase in the likelihood of an altcoin season. This type of volatility seems to put that hope on the backburner for now. 

What’s clear is that we’re continuing in the same market that we’ve been in for the last few weeks and it doesn’t look like we’ve broken the pattern yet. 

If anyone has a crystal ball, you know how to reach me.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Ethena Labs is leaping from its flagship synthetic dollar, USDe, to a full product suite—USDtb, iUSDe, and the Arbitrum-based Converge Chain—designed to marry crypto-native yields with TradFi-grade compliance. Our analysis shows how expanding into CME, ETF options, and tokenized Treasuries could lift protocol revenue from sub-$500 million in a bear case to several billion dollars if favorable regulation and institutional adoption align.

article-image

CEO Mike Silagadze tells Blockworks that the US is “open for business” and why its DeFi bank offering is the first of many

article-image

Doing one thing well and leaving everything else out is often what disruptive technologies do best

article-image

Why an analyst is kicking off COIN coverage with “buy” rating

article-image

“Bitcoin does not require a strong equity rally to move higher,” YouHodler markets chief Ruslan Lienkha said

article-image

President Trump’s comments that he will not look to fire Fed Chair Jerome Powell sent stocks higher in after-hours trading Tuesday