Bitcoin stagnates as altcoins surge
Bitcoin’s wild price swings are slowly becoming a distant memory, as traders await a breakout from the tight range that has squeezed the asset for the past two months.
Even bad publicity hasn’t budged the price, with bitcoin dropping only 1% last week despite getting caught up in a hacking scandal. Negative headlines hit the press on Wednesday after scammers sought donations in bitcoin from the compromised Twitter accounts of celebrities including Elon Musk and Barack Obama.
As bitcoin slumbers, lively altcoins continue to dominate the crypto market. Tezos increased by 6 percent over the week, and Stellar rose 5% after discussion of the cryptocurrency swept over social media.
This Week’s Highlights
- Stellar Pops as XRP Drops
- Bitcoin Volatility Drops to 20-month Low
Stellar Pops as XRP Drops
Stellar is the rising star of alt season. On Friday, the coin topped its recent rally just above $0.1, celebrating over 50% gains in July so far.
Rival payment network Ripple is lagging behind. XRP has fallen 1% over the past seven days, despite news from chief technology officer David Schwartz that the company is considering offering decentralized financial (DeFi) services to its institutional partners.
Despite the downside, traders remain confident about XRP’s future, and veteran technical analyst Peter Brandt has chimed on Twitter with expectations for higher prices.
Bitcoin Volatility Drops to 20-month Low
As bitcoin lingers in the same two-month range, volatility has dropped to levels not seen since November 2018.
The Bollinger Bands, which measure market volatility, have squeezed together so tightly on the bitcoin chart that they have even caught the attention of their inventor, John Bollinger. Prolonged periods of low volatility typically end with a violent move, and after the Bollinger Bands tightened in November 2018, bitcoin jumped off a cliff and shed 50% of its value.
Back then however, bitcoin was already in an established downtrend, and the recent uptrend makes an upward breakout more likely this time round.
The Week Ahead
One catalyst that could break bitcoin’s long period of consolidation is the asset’s ongoing correlation with the S&P 500.
Discussion of a new trillion dollar plus stimulus package is expected to set an optimistic tone for stock markets in the coming week, along with another round of earning reports from the likes of Microsoft and Tesla. On the other hand, escalating geopolitical tensions over the South China Sea and renewed coronavirus concerns threaten to curb upside momentum.
If stock market volatility is not enough to shake bitcoin out of its slumber, then cryptocurrency traders are likely to remain focused on the buoyant altcoin market.