Bitcoin (BTC-USD) and ethereum (ETH-USD) traded in negative territory on Friday morning and look to end the week with losses, while stocks rose and headed for a week of earnings, in a rare relationship that has speculators pondering.
Some investors have been taking note of the drop in volatility of bitcoin (BTC-USD) and ether (ETH-USD) in recent weeks, compared to the shaky stock market, as the price of the two largest cryptocurrencies by market capitalization continues to trade within a range after large declines seen earlier in the year.
Looking at intraday price action, bitcoin (BTC-USD) slid 1.6% at $19.01k at 10:34am ET compared to its peak of $68.9k in November 2021, and ether (ETH-USD) fell two% at $1.28K versus its all-time high of $4.64K in November a year ago. The three major stock indices each rose less than 1%, with Dow Jones (DJI) +0.7%S&P 500 (SP500) +0.5%and Nasdaq (COMP.IND) +0.2%.
Jim Bianco, President of Bianco Research, noted that the old Wall Street adage, “never sell a Dell market,” now applies to bitcoin (BTC-USD) as the token’s 30-day realized volatility (vol for short) fell to its lowest level in more than two years, he wrote in a series of Twitter publications. That may be even more the case for ether (ETH-USD), which has seen its realized volume drop to its lowest point in more than five years. These volume declines could be seen as negative because they imply that speculative demand is slowing down.
However, “this is an unquestionably good thing, as it means more people have Bitcoin as an investment, and fewer people have it as a speculative hot potato,” said Seeking Alpha contributor Logan Kane, who sees BTC as a buy. . “If volatility continues to decline, this means investors can expect a smoother ride and likely higher fair value as more people become comfortable allocating.”
However, the stock market is keeping market participants on their toes as the S&P 500 (SP500) realized volume is changing hands at one of the highest marks of the past decade against a backdrop of the aggressive monetary tightening campaign of the Federal Reserve, as well as the deepening recession. risks
“Markets are bottoming out of apathy, not excitement. BTC and ETH have apathy. The S&P 500 is almost the opposite, with prices moving like a video game. This could also be another sign of the breakout of the tight TradFi/Crypto ratio. If so, this is long-term bullish for crypto,” Bianco said.
Note that the S&P (SP500) has dropped the most in the last month (-4.9%), albeit by a small margin, than ether (ETH-USD) (-4.8%) and bitcoin (BTC-USD) (-1.1%), as seen in the graph below. That is a relatively unusual dynamic as the tokens, which are seen as an indicator of risk tolerance and general sentiment, easily saw swings of more than 5% in a single session, historically speaking.
SA contributor The Digital Trend believes that Bitcoin is ready to break out of its month-long period of silence and return to its typical volatile state.