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Fluctuating price of bitcoins

Fluctuating price of bitcoins

Bitcoin prices fluctuated little in the week ending 13th May, staying largely between $450 and $460 amid lackluster trading volume.

While Craig Wright’s claims of being bitcoin’s founder likely helped generate visibility for the digital currency and was still the subject of some headlines this week, this event has begun to fade from the public eye.

In the aftermath of Wright’s re-emergence after months of silence, market observers have once again turned their attention to the fundamental challenges facing bitcoin. Some observers say recent events in the bitcoin development community, particularly as it relates to network scaling, have had an impact on overall market activity.

Until developers create applications “which can successfully change Bitcoin’s fundamentals,” the digital currency’s price “will not fluctuate drastically,” Chen Xin, chief financial architect at OKCoin, said.

Others were more optimistic about the future development of bitcoin, including Daniel Masters, who runs the Global Advisors Bitcoin Investment Fund.

Relative Price Stability

This stability was reflected in bitcoin’s price movements in the seven days through 13th May at 12:00 UTC, as the digital currency edged 1.4% higher week-over-week, according to the CoinDesk USD Bitcoin Price Index (BPI).

Bitcoin did experience some notable price movements, reaching a weekly high of $464.21 between 15:00 UTC and 17:59 UTC on 9th May and a weekly low of $447.76 between 09:00 UTC and 11:59 UTC on 10th May.

After falling to that level, bitcoin remained largely between $450 and $455 for the remainder of the week. These mild price fluctuations took place as market participants traded 10.4m BTC during the seven days through 4:30 p.m. UTC on 13th May, Bitcoinity data reveals. While 48.35% of these trades, or 5.15m, went through Huobi, 45.10%, or 4.8m, were transacted through OKCoin.

The modest price movements bitcoin experienced recently contrast with the fluctuations of the last few weeks. Even though it has calmed down lately, some say the digital currency is still seeing notable volatility compared to other currencies.

“It’s a lot more stable compared to itself historically, but it is still far more volatile than fiat currencies,” Enneking continued. “Bitcoin will need to become even less volatile to receive the approval that most give to fiat currencies.”

Yet others view bitcoin’s declining volatility as a sign of progress. Joe Lee, founder of bitcoin derivatives trading platform Magnr, weighed in on how this relative calm could point to the market’s changing perception of the digital currency.

Forecast ahead unclear

The current stability could simply be the calm before the storm, as market data provided by full-service bitcoin trading platform Whaleclub on 11th May showed a long-short ratio of 5.1:1, sharply lower than the previous week’s figure of 3.1:1.

“We’ve observed many traders closing out their longs on the bounce from $440 to $465,” Petar Zivkovski, director of operations, said “Because of the large amounts of long positions that were stacked up in the price run up from the low $400’s, we believe there are still many long positions open and in the red across exchanges.”

While bitcoin markets have proved to be above prediction in the past, Zivkovski suggested that bigger moves might lie ahead.

“These could serve as good fuel for a long squeeze (further sell-offs) and could depress price to new swing lows,” he said.

Comments (2)

  • Bitcoin price has been fluctuating a lot in the past but, in my opinion, it will stabilize itself sooner or later. In my opinion, it all comes down to finding a way to increase the number of bitcoins available on the market and to increase the number of customers accepting bitcoins on a worldwide scale.

    Reply
  • many people believe btc price will reach 700$ after next halving

    Reply

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