Bitcoin (BTC) returned to above $45,000 on Friday as volatility faded.

Alternative cryptocurrencies (altcoins) were also higher, especially AAVE, which posted a 20% gain over the past 24 hours (up 60% over the past week) because of the platform's version 3 (v3) upgrade earlier this month. Ether (ETH) was up 4% over the past 24 hours, compared with a 9% rise in Solana's SOL token and a 1% rise in BTC over the same period.

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Meanwhile, stocks traded lower for most of the New York trading day after investors positioned themselves for aggressive monetary policy tightening because of strong U.S. employment data. Low interest rates and central bank stimulus contributed to rising asset prices. When inflation rises and the economy overheats, however, central banks reverse accommodative policies, which typically leads to higher market volatility.

In the bitcoin futures market, an uptick in short liquidations occurred over the past 24 hours because of the cryptocurrency's price jump. Liquidations happen when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin.

Still, the ratio of buy/sell volume was slightly negative on Friday, indicating low conviction among crypto traders despite BTC's price rise.

Bitcoin's trading volume across major exchanges remains relatively low, according to CoinDesk data, despite trading activity tending to increase around the first and last weeks of the month.

The chart below shows large volume spikes, which typically occur during price drops. Some analysts noticed that BTC tends to decline around the beginning of the month before a recovery unfolds, similar to what occurred in February and March.

The chart below shows a decline in the bitcoin put/call ratio, which suggests less bearish sentiment among option traders. The ratio has stabilized over the past two weeks, which could precede higher volatility, especially if BTC breaks above or below its short-term trading range.

The options market is placing a 55% probability that BTC will trade above $44,000 in May, according to data provided by Skew. And calls outweigh puts at strike prices above $45,000.

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Digital assets in the CoinDesk 20 ended the day higher.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.