Bitcoin and Ether Prices Stagnate as Traders Take Wait-and-See Approach

After staging a recovery earlier this week, cryptocurrencies were stuck in a holding pattern Friday afternoon.

Bitcoin (BTC) and ether (ETH) appeared to be in a period of consolidation where prices bounce around within a tight range, showing indecisiveness among traders. 

Bitcoin and ether had both climbed by less than a percent. Notable performers on CoinDesk’s big board include XRP (XRP), up 10 percent, Stellar (XLM) in the green 3 percent and dash, up 4 percent. All 24-hour price changes are from 20:00 UTC (4 p.m. ET) on March 27. 

Traditional markets, meanwhile, continued to reel from the record unemployment claims in the U.S., part of the fallout from the coronavirus outbreak, despite a $2 trillion stimulus package making its way to President Donald Trump for his signature. U.S. stocks closed with the S&P 500 index down 3 percent. Earlier in the day, Japan’s Nikkei 255 closed its session up 3.8 percent. For Europe, the FTSE 100 Index closed in the red 3.3 percent. 

See also: How a Flurry of ‘Digital Dollar’ Proposals Made It to Congress

Federal Reserve “and fiscal policies have averted for now accelerated economic and financial de-leveraging. Unfortunately, they can’t avoid a deep and sudden recession resulting in alarming unemployment and business closures,” Mohamed A. El-Erian, chief economic adviser at Allianz, wrote in a tweet. 

On low volumes, bitcoin’s price changes have narrowed, staying in a $6,400-$6,900 per 1 BTC range since March 24. This has put the bellwether cryptocurrency’s 10-day and 50-day moving averages close to each other.

“I think bitcoin just moved up from its $4,000-$5,000 crash range earlier than equities did. While equity markets have been rallying the last couple of sessions, other more safe haven-type markets like bonds and gold have been consolidating,” said Siddharth Jha, a former Wall Street analyst now focused on blockchain technology at startup Arbol. 

Indeed, gold has started to consolidate moving averages as of March 27.

“Some people I respect say gold is a buy here,” said Rupert Douglas, head of business development for institutional sales at Koine, a digital asset manager. “Perhaps it is, perhaps silver is going to go rocketing higher, but if it doesn’t and trades lower, does bitcoin follow?”

The crash on March 12 is still fresh in the minds of crypto traders and fund managers, leaving some to think no trading decisions are the best decisions for the time being. 

“Markets need to be saturated for people to look for incremental yield. Plus, there’s a lot of wound licking, post-BitMEX debacle,” said Vishal Shah, founder of Alpha5, a new derivatives exchange backed by large crypto funds. 

See also: Strange Days: S&P 500 Is More Volatile Than Bitcoin This Month

Shah was referring to the $700 million of liquidations on BitMEX on March 12. This caused problems for the Ethereum network-based DeFi ecosystem, which relies on ether’s price to ensure stability. Not surprisingly, ether has been consolidating, although there was a bit of volume early Friday. 

“After a major crash and rebound, markets often consolidate for some time to see which way the flows may develop,” Arbol’s Jha said.