Cryptocurrencies Continue to Trade in a Narrow Range – Here’s Why
The huge price swings and the wave of enormous volatility across the market that has taken off more than $2 billion from the cryptocurrency value in a single day left investors wondering which way prices are going to stand in the future. Although we haven’t seen any major steps from South Korea towards banning cryptocurrency trading, the crypto markets are struggling to expand the rally that started from late Wednesday.
Source: CoinMarketCap
Digital currencies are slightly down but traded in the narrow range during Friday trading.
Today, Morgan Stanley’s announcement of clearing bitcoin futures has provided some relief to cryptocurrency traders. Nevertheless, the support was short-term, as the market was hit by the SEC announcement of rejecting bitcoin ETFs.
Some of the companies were trying to list ETFs related to bitcoin, amid their low management fees and other advantages. However, SEC raised several questions before accepting the request. The majority of the questions were related to liquidity, valuation, potential manipulation, custody, and arbitrage.
SEC said “Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products, and we have asked sponsors that have registration statements filed for such products to withdraw them.
Moreover, the market also hasn’t discounted the news of the potential joint crackdown from Germany and France on cryptocurrency trading.
French Finance Minister Bruno Le Maire said, “The two countries will make joint proposals to regulate the bitcoin cryptocurrency at the next summit of the G20 group.”
Source: CoinMarketCap
The market seems to be ignoring these reports, as digital currencies continue to trade in a narrow range. Bitcoin started the day around $11,400 and after sideways movement all over the day, the digital currency was trading only a few dollars lower towards the end of the day.
The situation was quite the same for Ethereum and Ripple, the second and third largest currencies based on market capitalization. After trading in a narrow range, Ethereum was down 3.94% in the past 24 horus, while Ripple lost 7.5%. Overall, it appears that traders are closely looking towards regulatory requirements from South Korea and China, the countries that account for the majority of the overall cryptocurrency market.