The fear with the low-vol, low-volumes noxious mix is that such an environment could mean prices drop faster in the event of a selloff.
“In an overall bear market, you do not want low volatility coupled with low volume because we’re already in recessionary period, we believe it could get worse and the Fed will continue to raise rates and people might start taking money off the table,” said Steven McClurg, co-founder and chief investment officer at digital-asset fund manager Valkyrie Investments. “And when there’s low volume and low volatility, it will cause prices to go down faster, it could cause higher volatility.”
This article was provided by Bloomberg News.