With Bitcoin Boring Again, Traders Brace for Another Round of Crypto Volatility
Bitcoin BTCUSD –0.02% and other cryptocurrencies were little changed Tuesday as digital assets looked to be settling into another trading lull.
While the last such boring stretch lasted three months, traders are betting they’ll see volatility sooner than that.
The price of Bitcoin has hovered around flat over the past 24 hours at near $25,950, with the largest digital asset remaining near the $26,000 level that has dominated for much of the past two weeks now since a selloff from $29,000.
The narrow range has also become a hallmark of Bitcoin, which has been walking on a short leash of around $26,000 for the past eleven days.
Such a lull usually ends with a boom in volatility, which is what we should expect this week,” said Alex Kuptsikevich, an analyst at broker FxPro.
Bitcoin is only just emerging out of one of the lowest volatility periods on record, when it fluctuated in a range between around $29,000 and $30,000 for nearly three months before a selloff down to the mid-June lows on Aug. 17.
Now Bitcoin looks to be in yet another lull, stagnating around $26,000 despite big swings in the stock market which often coincide with crypto chaos—where volatility has gripped the Dow Jones Industrial AverageDJIA +0.62% and S&P 500SPX +0.63% in recent days.
Kuptsikevich and others are betting that the current period of stability won’t last, especially with influential macro catalysts in the coming days, including the U.S. jobs report due Friday.
The jobs report will be influential in shaping the Federal Reserve’s next move on monetary policy, with the outlook for interest rates remaining an important force for risk-sensitive assets like stocks and cryptos.
With Bitcoin failing to rebound after its selloff earlier in August, and catalysts looming, risks seem skewed to the downside.
Short-term oversold conditions have failed to produce a meaningful bounce,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies.
The risk of a breakdown below initial support at around $25,200 remains elevated given weak intermediate-term momentum.”
Beyond Bitcoin, EtherETHUSD –0.08% —the second-largest crypto—has advanced less than 1% to around $1,650. Smaller tokens, or altcoins, traded higher, with both Cardano and Polygon rising more than 1%.
Memecoins were mixed, with Dogecoin DOGEUSD –0.79% up less than 1% but Shiba Inu surging 3%.
Byfinance.yahoo
