Bitcoin price broke out of its narrowest trading range in months in the waning days of March following a rough start to the year.
With the largest cryptocurrency settling in near the top of the $30,000 to $50,000 range he predicted just weeks ago, Michael Novogratz said Thursday that he was “more constructive” on crypto while also not providing a new forecast.
Bitcoin traded within 10% of its 50-day average price for 51 days through March 26, the longest stretch of tight trading since July 2020, according to data compiled by Bloomberg.
The coin had, as of Friday, traded below that threshold for 95 days, the longest streak of bearish pattern since April 2019.
Digital assets, like many other riskier areas of the market, have been beset by a Fed working on tamping down inflation, as well as turmoil sparked by Russia’s unprovoked invasion of Ukraine.
“There seems to be a range where Bitcoin starts to look like a pong game,” said Chris Kline, COO and co-founder of Bitcoin IRA.
The 90-day correlation coefficient of the coin and the stocks gauge now stands at 0.55, among the highest such readings since Bloomberg started tracking the data.
UBS strategists including James Malcolm and Alexey Ostapchuk, say it’s difficult to find evidence of a broader pickup in interest around cryptocurrencies.
He described Bitcoin’s trading as “still bang in the middle of the range,” and says he’s sticking to his view the year will be a difficult one for cryptos.
Malcolm says we’re in a moment when both bulls and bears can come up with a convincing narrative.
To be sure, crypto products are still seeing inflows, with Bloomberg data compiled by UBS showing digital-asset ETFs attracted roughly $550 million over the past two weeks.
“From an investment standpoint, it should be viewed as something that is highly speculative and should not be a meaningful part of a client portfolio because of its very high levels of volatility and just uncertain utility over time,” Jeremy Zirin, senior portfolio manager and head of private client U.S.
The current moment is setting the historical precedent and investors and strategists are trying to figure out how Bitcoin behaves during different points of an economic cycle and what it’s correlated with.
“I tell people that are interested in crypto that it’s OK to have a small portion of your portfolio in it,” she said.
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