In the ever-curiouser markets of 2020, bitcoin is only slightly more volatile than the S&P 500 and nowhere close to the bumpy ride oil has been on.
In early trading at 00:00 UTC, the world’s oldest cryptocurrency was in $8,800 territory before jumping as high as $9,125 on spot exchanges like Coinbase.
After that quick run-up, bitcoin quickly sold off back to $8,800 levels at 11:00 UTC (7 a.m. EDT). With 10-day and 50-day technical indicator moving averages signaling tepid sentiment Tuesday, bitcoin is experiencing little trading action, staying at the $8,800 price range. At press time bitcoin (BTC) was trading up less than a percent over 24 hours at $8,945.
The sideways action, also known as “consolidation,” is a pattern of predictable behavior during which traders like Jack Tan, founding partner at Taiwan-based crypto trading firm Kronos Research, seek various price levels in which to trade in and out.
“We are still in a consolidation phase as the next level is $14,000, I believe,” said Tan. “I think $8,400-ish should hold on the daily chart. If not, then it invalidates the bullish thesis.”
For a crypto trader to call a range between $8,400 to $14,000 is a pretty wide guess and a sign volatility could be the name of the game for the next week or two. After a brief period in which the S&P 500 was more volatile than bitcoin, the latter regained its status as the rockier asset last week, though only slightly so. On Tuesday, the S&P 500 index of U.S. stocks was up less than a percent.
Bitcoin volatility rising a bit since late April is likely making it harder for traders to figure out what’s going to happen before and after the network’s once-in-four-year reward halving from 12.5 to 6.25 BTC, set for approximately May 12.