Stocks dropped but bitcoin (BTC) continued its stodgy ways in Tuesday trading.
The largest cryptocurrency by market capitalization was recently trading near $27,200, up 1.1% over the past 24 hours. Bitcoin topped $27,400 shortly before European equity markets opened. For nearly two weeks, BTC has stood range-bound between $26,500 and $27,500 as investors fret over ongoing crypto regulatory issues that have sapped liquidity from markets and macroeconomic uncertainties, including the recent U.S. debt ceiling stalemate.
“After the market tumult of 2022, sideways movement has felt a lot better than downward movement,” Tim Frost, CEO of digital wealth platform Yield App, quipped in an email to CoinDesk, although he added that “it does feel like crypto markets are stagnating. Right now, we simply have existing liquidity moving around in different directions, with really only the crypto true believers and active traders still participating.”
Frost noted that the crypto market’s current capitalization of about $1.3 trillion has remained at a near standstill from a year ago. “There doesn’t yet seem to be a catalyst on the horizon that could move things in either direction,” Frost wrote. “The global macro picture remains uncertain, although more positive, with inflation falling in the US and potentially in the UK and EU in the coming months. Right now, though there’s not much shaking.”
The latest reading on U.S. inflation, based on the Consumer Price Index, came in below 5% for the first time since early 2021, although it remains well above the Federal Reserve's goal of 2%.
Ether (ETH) also remained in its two-week range, changing hands at $1,850, up roughly 1.6% over 24 hours. Most other major cryptos were in positive territory, albeit not by much, with APT and SOL, the native tokens of the Solana and Aptos smart contracts platforms, recently rising 3.8% and 2.1%, respectively. The CoinDesk Market Index, a measure of crypto markets performance, recently rose 1.1%.
Stocks fell amid debt limit anxieties, with the technology-focused Nasdaq Composite closing down 1.2% a day after reaching a 2023 high, and the S&P 500, which has a hefty tech component, and Dow Jones Industrial Average (DJIA) declining 1.1% and 0.6%, respectively.
Yields on 2- and 10-year Treasurys both reached near their highest levels since March before ticking downward slightly.
Crypto markets received a modest boon on Monday when a leaked document seen by CoinDesk showed a willingness by the European Commission willing to moderate an earlier tough stance on crypto and make it easier for commercial lenders to hold stablecoins and tokenized assets.
Meanwhile, in an email to CoinDesk, Strahinja Savic, head of data & analytics at Canada-based FRNT Financial, wrote that the correlation between the S&P 500 and bitcoin has been dropping since April to -0.23.
“This break in correlation between bitcoin and traditional assets has been a prevailing theme that seems to be continuing in 2023,” Savic wrote. “As some macro catalysts come to a head, like the debt ceiling debate or Fed rate policy, it will be interesting to watch how much bitcoin has decoupled from the broader market.”
Savic also noted that the percentage of bitcoin’s total supply “has remained unmoved for over a year, reaching a new record of 62.13%. “Bitcoin ‘hodlers’ remain committed to the asset at the moment,” he wrote.
UPDATE (May 23, 2023, 22:33 UTC): Adds recent CoinDesk Market Index.
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