Bitcoin Price Stuck in Holding Pattern Following Selloff on Wall Street

Bitcoin resumed its narrow trading range on Thursday, as a dearth of market-moving headlines kept investors on the sidelines yet again.

BTC/USD Update

The bitcoin price saw limited movement on either side of the spectrum Thursday, as markets resumed their narrow consolidation. Over the past 24 hours, BTC had a peak-to-trough of $6,517.75 – $6,447.03, according to CoinMarketCap. At the time of writing, the digital currency was valued at $6,475, where it was down 0.4% from the previous day.

Bitcoin has maintained its premium on Bitfinex, though the spread has narrowed considerably this week. Bitfinex is currently quoting a price-per-coin of $6,548.

Daily turnover in bitcoin remains very weak by historical standards and well below levels generally observed during prolonged rallies. Trading in BTC reached $3.4 billion on virtual currency exchanges over the past 24 hours, based on latest available data.

Bitcoin’s share of the overall cryptocurrency market is 53.7%, little changed for most of the week.

Stock Markets Plunge

Bitcoin’s declining volatility contrasts sharply with the recent selloff in global equity markets, which came to a head on Thursday when the Nasdaq Composite Index recorded one of its worst days in history. The technology-laden average plunged 4.4% during yesterday’s rout, officially entering correction territory. In markets, a correction is a 10% drop from the most recent high.

U.S. stocks have erased all their gains in 2018, a clear sign that the Trump reflation trade had subsided. The CBOE Volatility Index, also known as the VIX, closed above 25.00 on Thursday, its highest settlement in eight months. A VIX reading above 20 normally indicates higher than usual volatility for the S&P 500.

Meanwhile, bitcoin’s 30-day volatility index is once again approaching 18-month lows, signaling even narrower trading ranges for the leading digital currency. As of Wednesday, the 30-day volatility tracker was 1.62%, according to bitvol.info. This measure of historical volatility is calculated by using the standard deviation of the daily open price in BTC for the preceding 30 days.

Zooming out in time, the 60-day volatility index is 2.13%. Over the past 120 days, bitcoin’s average volatility is down to 2.73%, based on latest available data.

While the hypothesis that declining equity prices will generate fresh bids for bitcoin has not come to fruition, the digital currency continues to decouple from the broader market as a non-correlated asset. This could prove valuable for risk-off investors looking to diversify away from volatile equity, currency and bond markets.

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.

Author:
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