It’s been a boring week for Bitcoin and Ethereum prices. Do not expect it to remain so

Bitcoin and ethereum have been boring lately.

Considering that 15% daily fluctuations are the norm in the crypto market, prices have not moved much in recent days, with bitcoin remaining stable near $ 19,000 to $ 20,000 and ethereum floating around $ 1100. The two largest cryptocurrencies appear to be hovering around their current price levels with no clear direction in sight.

“At this point, $ 19,000 to $ 20,000 are simply previous highs from the last big bull market in 2017,” said Stéphane Ouellette, CFA and founder of FRNT Financial, an institutional capital markets and advisory platform focused on digital assets. In other words, it is difficult to predict what will happen next and when. “The Bitcoin and ethereum futures curves are completely flat, which suggests that the market is also completely uncertain about the future direction,” he says.

The crypto market is still under intense pressure, with the possibility of a new downturn. How low bitcoin will go in the coming weeks or months will depend on “whether the stock market reached a bottom and whether no major crypto companies fall into liquidation,” according to Edward Moya, a senior market analyst at OANDA, a brokerage firm.

“A plethora of bearish cryptocurrencies continue to pull bitcoin down below key technical levels. Sentiment will take some time to improve, especially after many expected cryptocurrencies fall apart,” Moya said, referring to the cryptocurrency exchange eToro leaving a deal to be announced via SPAC merger, while many troubled companies such as BlockFi and Voyager are striving for agreements to stay afloat.

What happens to cryptocurrencies and what does it mean for investors?

Bitcoin on Wednesday was up almost 2.5% over the last 24 hours, trading close to $ 20,000. Ethereum’s price remained stable close to $ 1100, up 3% over the last 24 hours. Although the two largest cryptocurrencies have experienced a slight upswing in the last day, experts say that we are not out of the danger zone yet.

Bitcoin and ethereum have lost more than two-thirds of their value since November last year, and experts predict that cryptocurrencies may fall even more now that the price of bitcoin has fallen below $ 20,000 several times in recent weeks. On top of that, investors still feel uncertainty about current economic conditions such as rising inflation, a potential recession in the US, rising interest rates and a shaky stock market.

“Bitcoin is stuck in its current trading area due to the ‘nervousness’ of market participants,” says Joshua Fernando, derivatives trader at BOK Financial. “They have seen wild fluctuations in recent months that have ruined the market, so it is reasonable that they are now trading cautiously.”

Martin Hiesboeck, head of blockchain and cryptocurrency research at Uphold, says that bitcoin does not move much below or above the $ 20,000 level due to “lack of stimuli.”

“There is no doubt that the market is waiting for macroeconomic news and less tension on geopolitical issues – with the war in Ukraine, the inflation spectrum and possible recession as by far the biggest concerns,” he says.

So, what should crypto investors do in light of this? Nothing, experts say. If you have invested in crypto in the long run using a buy-and-hold strategy, price fluctuations are to be expected and large falls are nothing to worry about.

Experts recommend keeping your cryptocurrency investments below 5% of your portfolio, as long as your crypto investments do not stand in the way of your other financial goals. Always prioritize saving for an emergency, pay down high-interest debt and contribute to a traditional retirement plan before you ever invest in crypto. If you are in a good place financially and ready to enter the market, experts say that now may be a good time to buy bitcoin or ethereum while prices are low, given that prices may fall more.

“Perhaps, like equities, investors were a little carried away by the ‘buy it all’ frenzy of 2021, sitting on the sidelines waiting for signs that equilibrium has been restored and that the beef market is up and running again,” Fernando said.