Bitcoin Hovers Above $10K as Volatility Plummets to Four-Month Low

Bitcoin’s price was deadlocked just above $10,000 on Wednesday, as volatility plunged to the lowest levels since mid-May.

In crypto trading, volatility is a double-edged sword; you need it to generate the spectacular runs seen earlier this year, but it also creates the type of instability that has become synonymous with digital assets.

BTC/USD Update

The bitcoin price briefly lost the $10,000 handle on Wednesday, falling to a session low of $9,855.11 on Bitstamp. At last check, BTC/USD was trading at $10,084, where it was little changed.

Bitcoin (BTC/USD) quickly regains its footing above $10,000. | Source: TradingView.

Trade volumes have plummeted in the last 24 hours, falling some 22% to $546.5 million, according to Bitwise data.

Declining volumes are also reflected in bitcoin’s 30-day volatility index, which measures the magnitude of daily price fluctuations over that period. As of Tuesday, bitcoin’s 30-day volatility index had fallen to 3.09%, the lowest in four months, according to bitvol.info.

The bitcoin market is far less volatile today than it was just a few months ago. | Source: bitvol.info

At current values, bitcoin has a total market capitalization of $181.4 billion.

Crypto Markets on Edge

Bitcoin’s lack of committed direction has put downward pressure on altcoins and tokens, which continue to see limited upside. On Wednesday, most of the top cryptocurrencies reported mixed-to-lower trading results.

Ethereum (ETH), the second largest cryptocurrency by market cap, drifted 1% lower to $179.84.

XRP declined 1.9% to $0.2565.

Bitcoin cash (BCH) was off by about 1.4% to trade at $302.03.

Stellar (XLM) extended its free-fall, dropping 2.6% to $0.0585. The 12th largest blockchain announced earlier this week that it was giving away $124 million worth of XLM in the “largest airdrop” to date, according to Forbes.

The combined value of all cryptcurrencies now hovers just above $260.4 billion. Altcoins and tokens represent just 30.4% of that market.

Crypto markets continue to drift lower. | Source: CoinMarketCap.

Downward pressure on altcoins is expected to persist for the foreseeable future as bitcoin continues to exert its dominance. The Ethereum-bitcoin exchange rate, long viewed as a proxy for altcoin demand, is trading near two-and-a-half year lows.

Whereas bitcoin has been able to attract institutional investors and long-term holders, altcoins have slowly unwinding since bursting of the ICO bubble last year. Many of the leading alts showed promise through the early part of the year, but have failed to maintain those gains. In fact, several cryptocurrencies have tested new cycle lows in recent weeks.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Charts via TradingView and CoinMarketCap.

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Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi