Bitcoin remains confined in a tight range within 10% of its one-year high of over $31,000, experiencing the lowest annualized 30-day volatility since July 2020. Analysts say this stagnation will persist in the short-term, regardless of pending decisions due from the Securities and Exchange Commission about applications for spot bitcoin ETFs.
The recent filings for the spot funds from financial institutions such as BlackRock and Fidelity have sparked optimism, but it's not clear how long that enthusiasm can be sustained, as the SEC can delay the review process. The regulator last extended its review period for the prospective ARK 21Shares Bitcoin ETF until Aug. 13.
Market signals don't indicate an immediate decision from the SEC, but instead imply long-term volatility.
“The Deribit forward volume curve does not show the market [is positioning] itself for a short-term ETF decision by the SEC," Luuk Strijers, chief commercial officer of Deribit, told The Block. "We see quite some steepness of the curve longer term implying some expectations for volatility in the longer run but not in August."
More delays expected
This concurred with the view of Chris Bendiksen, research lead at CoinShares, who said "almost no one I’m talking to expects anything to really happen on the first due dates."
He added that historical precedents point toward the SEC using its full allowance of extensions before making any final decisions.
"A break from the norm would be a welcome surprise but I’m not expecting it and I don’t see a lot of other people expecting it either," he told The Block.
U.S. dollar competition
The research lead added that price-impacting conditions for bitcoin are significantly affected by the digital asset's main competitor, the U.S. dollar. A view echoed by Gordon Grant, head of trading at Genesis, who told The Block the recent downgrade of U.S. credit rating and rising Treasury borrowing encouraged investors to seek out a "hard money" alternative like bitcoin.
"Macroeconomic factors cannot be discounted and lower-than-expected inflation or a slowing pace of interest rate hikes, can have a positive effect on risk asset sentiment, thereby potentially influencing bitcoin's price trajectory," co-founder at Sei Labs Jeff Feng said.
The world's largest digital asset by market capitalization traded flat over the past 24 hours, rising only 0.4% to $29,200 at 9:00 p.m. ET, according to CoinGecko.
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