Bitcoin, Ether Slides Even With Higher Stock Market (Cryptocurrency:BTC-USD)

Bitcoin (BTC-USD) and ethereum (ETH-USD) traded in negative territory in Friday morning trading and look set to end the week with losses, while stocks pushed higher and on track for a week of gains, in a rare ratio that has speculators mulling over.

Some investors have noticed bitcoin (BTC-USD) and ether (ETH-USD) falling volatility in recent weeks, compared to the surging stock market, as the prices of the two largest cryptocurrencies by market capitalization continue to trade in range after big drops seen in beginning of the year.

Looking at intraday price action, bitcoin (BTC-USD) fell. 1.6% to USD 19.01,000 at 10:34 a.m. ET compared to the November 2021 peak of $68.9,000, and Ether (ETH-USD) drifted lower 2% to $1.28,000 against the $4.64,000 all-time high in November a year ago. All three major stock indexes each rose less than 1%, with the Dow Jones (DJI) +0.7%S&P 500 (SP500) +0.5%and Nasdaq (COMP.IND) +0.2%.

Jim Bianco, the president of Bianco Research, pointed out that the old Wall Street adage, “never short a dell market,” now applies to bitcoin (BTC-USD) as the token’s 30-day realized volatility (vol for short) fell to a low of more than two years, he wrote in a series on Twitter posts. That may be even more the case for ether (ETH-USD), which has seen its realized volume plummet to its lowest point in over five years. These volume falls can be seen as negative because it suggests that speculative demand is decreasing.

However, “this is undoubtedly a good thing, as it means more people are holding Bitcoin as an investment, and fewer people are holding it as a speculative hot potato,” said Seeking Alpha contributor Logan Kane, who views BTC as a buy. “Should volatility continue to ease, this means investors can expect a smoother ride and likely a higher fair value as more people become comfortable with allocating.”

However, the stock market is keeping market participants on their toes as the S&P 500’s (SP500) realized that vol is changing hands to one of the highest grades in the past decade on the back of the Federal Reserve’s aggressive monetary tightening campaign as well as rising recession risks.

“Markets are bottoming on apathy, not excitement. BTC and ETH have apathy. The S&P 500 is almost the opposite, as prices move around like a video game. This could also be another sign that the TradFi/Crypto relationship is breaking. If so, this is long-term bullish for crypto,” Bianco asserted.

Note that the S&P (SP500) has fallen more in the past month (-4.9%), but by a small margin, than ether (ETH-USD) (-4.8%) and bitcoin (BTC-USD) (-1.1%), as shown in the diagram below. It’s a relatively unusual dynamic as tokens, which are seen as a gauge of risk tolerance and general sentiment, have easily seen over 5% swings in a single session, historically.

Fellow SA contributor The Digital Trend believes bitcoin is set to escape its months-long lull and return to its typical volatile state.