Bitcoin has displayed little volatility over the last week, continuing a trend that has existed for the last few months.
The world’s largest digital currency by market value fluctuated between $3,500 and $3,700 during the last week, CoinDesk data reveals, even as traders received several positive news developments.
J.P. Morgan announced February 14 that it had created JPM Coin, a digital currency designed to enable instant payments between the company’s institutional clients.
Investment manager Morgan Creek Capital revealed on February 12 that it had drawn substantial investment from two public pension funds for a crypto-focused venture fund.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
In spite of these developments, Bitcoin prices have remained largely unchanged as of late.
When explaining this situation, analysts pointed to factors aside from fundamentals as being key drivers of the digital currency markets.
“The fundamentals, no matter how strong they may be, are subservient to the technical analysis and overall sentiment,” emphasized Mati Greenspan, senior analyst for social trading platform eToro.
He noted that “During the bull run of 2017, all news was interpreted as good, during the bear in 2018 all news was interpreted as bad.”
Currently, Bitcoin is in a “sideways” market, stated Marius Rupsys, a digital currency analyst and investor.
The cryptocurrency is “trying to find its bottom,” he maintained.
Lackluster Trading Activity
While the cryptocurrency has been fluctuating within a relatively tight range, low trading volume means this situation could end soon enough.
“Given Bitcoin does not have massive liquidity, price can start moving [in] either direction and volatility can easily pick up,” even though it has been trading sideways, stated Rupsys.
Jon Pearlstone, publisher of the newsletter CryptoPatterns, offered a similar perspective.
“While the big picture shows Bitcoin continuing it’s multiweek consolidation pattern, the last week has offered bullish signs with price moving up over 10% with increasing volume in one day moving above $3500 which notably has held since that time,” he stated.
“At the same time key large altcoin Ethereum spiked nearly 20% and has also held those gains,” added Pearlstone.
“The crypto market has moved in response to these two coins for the last two years, so while this is not the moonshot crypto traders keep waiting for, it does support that bullish sentiment is building,” he noted.
“In addition, daily charts are now showing bullish moving average crosses on multiple charts which adds support a trading edge for higher prices,” Pearlstone added.