Bitcoin Loses Mojo After First-Half Rally Fails to Reignite Enthusiasm

Chalk it up to the heat, to late-summer doldrums, or to the phases of the moon, but the usually volatile Bitcoin hasn’t been acting in its typical sporadic ways of late.

“We’ve seen Bitcoin confined to narrow ranges throughout previous bear cycles,” said Strahinja Savic (AP)

Chalk it up to the heat, to late-summer doldrums, or to the phases of the moon, but the usually volatile Bitcoin hasn't been acting in its typical sporadic ways of late.

The largest digital currency has gone eight trading sessions without a 1% move, the longest such stretch since the start of January, according to data compiled by Bloomberg. Before that, one has to go back to October 2018 to find such a streak.

It's a change of pace for the typically volatile coin, for which wild price swings and endless days of choppiness have been one of its key characteristics. Bitcoin rallied over 80% in the first half of the year, after tumbling 64% in 2022. And it's happened as trading volumes have also waned, creating an environment that some market-watchers say is “quite unusual.”

“We've seen Bitcoin confined to narrow ranges throughout previous bear cycles,” said Strahinja Savic, head of data and analytics at FRNT Financial. “Then, like now, broader enthusiasm for crypto waned,” he said, adding that Google searches for “Bitcoin” are a fraction of what they were in May 2021, when interest had peaked.

Bitcoin has been mired in a tight trading range of late, hovering around the $29,000 level. In fact, through July 20, the coin's intraday high-low range over the prior four weeks was just 7.8%, the narrowest monthly range since April 2016, according to Bespoke Investment Group. Since November 2013, when Bitcoin first crossed above $1,000, there have only been eight other periods where its trailing four-week range was less than 10%.

Its moves have been muted even as there's been plenty of excitement from the crypto community about potential future developments for the space, including the possible launch of a spot-Bitcoin ETF in the US, which fans have clamored for for years. A number of ETF issuers are also trying their hand at Ether-futures funds, filing paperwork for such products in rapid succession over the past week as some sense that regulators might be more open to letting such a fund launch.

Other asset classes, however, have been posting more pronounced moves, with stocks — in particular big-cap tech names — notching big rallies in recent weeks. The Nasdaq 100 is up 2% since the start of July.

Despite all the excitement, Bitcoin's moves have been serene even when viewed over a longer term: a measure of volatility that looks at the past 180 days is at multi-year lows for market leaders Bitcoin and Ether, according to data from Kaiko. It has only been lower on a few occasions since 2012.

“While there is some healthy dose of FOMO that is making its way into the markets via recent tech, semiconductor, innovation and distribution-type of trading like AI, machine learning, I don't think that this risk appetite has yet fully extended to Bitcoin or Ether,” said Sylvia Jablonski, co-founder and chief investment officer at Defiance ETFs.