It was more of the same from
Bitcoin
and other cryptocurrencies on Monday as digital assets continued to languish at relatively depressed levels amid a period of historically low volatility. The lack of action is starting to unnerve some market observers.
The price of Bitcoin has traded flat over the past 24 hours at just shy of $29,400. The largest digital asset remains below the psychologically important $30,000 level which has provided support for months before a slide lower in late July.
“Bitcoin has been very choppy over the last couple of months but it hasn’t really gone anywhere in that time,” said Craig Erlam, an analyst at broker Oanda. “From trading largely between $30,000-$31,000 between late June and early July to mostly between $29,000-$30,000 since, it’s not been the most thrilling of periods.”
That is an understatement: Bitcoin, by multiple metrics, is in the midst of a lull of historic proportions. The volatility characteristic of cryptos has collapsed, even as other risk-sensitive assets like stocks continue to exhibit excitement, with the
Dow Jones Industrial Average
and
S&P 500
making Bitcoin look boring by comparison.
The fact that this lack of volatility comes amid catalysts that should move cryptos is noteworthy. Traders have eyed applications for spot Bitcoin exchange-traded funds (ETFs), ongoing regulatory challenges in the U.S., and the historic downgrade of the U.S. credit rating by Fitch—but none of them have really moved the needle much.
This latter catalyst, in particular, is concerning, noted Huw Roberts, head of analytics at research group Quant Insight. A key narrative behind Bitcoin is that it offers a decentralized alternative to fiat currencies, so Fitch’s downgrade of the U.S. credit rating should have been a critical support of that thesis.
“Has Bitcoin failed?” asked Roberts. “Downgrading the U.S. should surely have been the biggest green light to buy Bitcoin. If crypto can’t catch a bid when ratings agencies point to ballooning U.S. budget deficits and political gamesmanship over fiscal policy, when would be the time for crypto to receive elevated consideration.”
Beyond Bitcoin,
Ether
—the second-largest token—was just below flat at $1,850. Smaller cryptos, or altcoins, were mixed, with
Cardano
slipping less than 1% and
Polygon
less than 1% higher. Memecoins were in the red, with
Dogecoin
down 2% and
Shiba Inu
shedding less than 1%.
Write to Jack Denton at [email protected]
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