Bitcoin’s (BTC/USD) traded price is going through its least volatile stretch since late December.
In the last 72 hours, bitcoin has not budged more than 1.5% off its mid-point. And during the past two weeks, volatility has been at most 8% in either direction.
While price stability can be considered a good thing, the current trading behavior may be cause for some concern. First, prices are stuck in a drawn out downtrend within the tight trading range and are showing no signs of breaking it.
Second, the ongoing pattern highly resembles that of late December, which also trended downward in a tight range, and which soon after deteriorated into steep losses of up to 50%.
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Not typical, however, for such stable periods is the relatively healthy trading volume. An average of 500 BTC are changing hands per hour, albeit erratically, implying the current stability is not merely a byproduct of lack of interest.
After an initial shock, prices have shaken off the MyCoin news. Traders have seen little reason to panic as they did following the MtGox collapse one year ago, and the scale of loss still remains in doubt.
Should the upper/lower limits near $240/$210 be broken, expect volumes to rise and a reintroduction of major moves.
Prices on BTC-e are $4 (1.8%) below those on its peers, a slightly larger than average offset.