Markets Weekly is a weekly column analyzing price movements in the global digital currency markets, and the technology’s use case as an asset class.
The price of bitcoin experienced relative price stability and consistent volume during the seven days through 1st April, maintaining its recent status quo as market participants await resolutions to lingering uncertainties.
The digital currency’s price has seen modest volatility since the start of March, but some experts have warned that this situation could soon change. While some cited technical indicators in predicting that bitcoin may become more volatile, one expert asserted the current situation is merely the “calm before the storm”.
Arthur Hayes, co-founder and CEO of BitMEX, shed some light on how geopolitical developments could potentially increase demand for alternative means of savings, which he suggested could mean digital currencies.
“I think the negative interest rate theme is becoming more and more relevant to people around the world,” he stated, adding:
“Greek banks are now charging to change large into small denomination bills. This is only going to accelerate the trend of people to search out alternative means of savings.”
Tempering this opinion, however, is that macro-economic volatilities seem to have less impact on the bitcoin trading ecosystem of late.
For example, the ongoing drama over whether the UK will leave the European Union, dubbed the ‘Brexit‘, does not seem to have captured the interest of traders, at least not at the levels of last year’s ‘Grexit’, which helped to push the digital currency’s value to yearly highs.
Larger developments aside, bitcoin’s price fluctuated largely within a modest range between $410 and $425 during the week ending 12:00 UTC on 1st April, according to CoinDesk’s Bitcoin Price Index (BPI).
It reached a high of $426.85 at 18:00 UTC on 27th March and a low of $410.50 at 13:00 UTC on 30th March.
Week-over-week, bitcoin’s price was largely unchanged, starting at $412.89 at 12:00 UTC on 25th March and finishing at $415.51 at 12:00 UTC on 1st April.
Market participants traded more than 32m BTC during the period, and more than 97% of this volume took place between OKCoin and Huobi, Bitcoinity data shows. Market participants traded 17m BTC, or 51.38% of total weekly volume, through the former exchange, while another 15.2m BTC, or 45.93%, was transacted through the latter.
These patterns of robust trading volume and modest price fluctuations followed the trend set during the prior two weeks.
In the seven days through 25th March, the digital currency fluctuated between $405 and $420, but experienced only a modest week-over-week change, additional BPI figures reveal. In addition, market participants traded 32.6m BTC.
The story was similar in the week ending 18th March, when bitcoin moved within a tight range between $410 and $420 and market participants traded 30m BTC.
Bitcoin has lingered mostly between $410 and $425 since early March, but one expert told CoinDesk that this trend is long overdue for a change.
“The price has spent way too long in this range, and its going to make a big move soon,” argued George Samman, a blockchain advisor and consultant. “Looking at the technicals a major volatility squeeze is coming. So far the price has held above key support which is basically right here between $400-$415.”
“If it breaks through support its going to break hard,” he added. “I think very soon we will know in which direction it wants to go.”
Should bitcoin experience the sharp price movement Samman suspects may take place, this development could help spur greater interest in speculative trading, a form of activity one market expert believes has fallen to the wayside as of late.
This lack of interest is evidenced by bitcoin’s “narrow trading range and low levels of liquidity,” Joe Lee, founder of bitcoin derivatives trading platform Magnr, told CoinDesk. However, he emphasized that this may all be temporary, and that market conditions could rapidly change.
He emphasized the silver lining of the modest volatility bitcoin has been experiencing, adding:
“A stable price shows continual belief that the outcome of the block size debate and network congestion will not affect bitcoin’s longer term value.”
Charles L. Bovaird II is a financial writer and consultant with strong knowledge of securities markets and investing concepts.
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