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Bitcoin’s price was holding steady on Wednesday, showing little change over the past 24 hours. At around 02:30 UTC (9 p.m. ET Tuesday), the world’s largest cryptocurrency went as high as $55,710. It then lost steam and returned to the $54,000 level but was at $54,925 as of press time. 

Over-the-counter crypto trader Alessandro Andreotti says bitcoin’s stagnant market is due to investors continuing to explore other cryptocurrencies. ”Bitcoin has, in fact, gone up, but I see it as a consolidation move to a new price range,” Andreotti said. “It’s staying relatively stable right now while alts moon.”

Alternative cryptocurrencies, or “alts,” are certainly shining. Bitcoin’s dominance, a measure of its share of cryptocurrency market capitalization, has dropped over 16% to 50.45% since the start of April, according to calculations by charting provider TradingView. 

“You can see bitcoin dominance has been steadily decreasing over the last day and week,” added Andreotti. “Overall, the crypto market is behaving in a very similar way to the 2017 run. If it keeps doing that, we can expect a new run for bitcoin in the short to mid term, possibly a new all-time high even, while alts consolidate at their new price ranges.”

In the derivatives space, open interest in bitcoin futures across major venues is way down so far this week. Last week, the total open interest hit $523 billion. So far this week, that number is a paltry $124 billion, according to data aggregator Skew.

As the bitcoin boredom continues, the crypto ecosystem has excitement in the form of ether and decentralized finance, or DeFi, according to Rich Rosenblum, president of cryptocurrency market maker GSR. 

“As the space matures, we’ll see more dispersion,” Rosenblum told CoinDesk. “BTC is increasingly a proxy for traditional finance coming to the space via regulated platforms, while ether is more of the crypto natives buying ETH directly or indirectly as a result of DeFi.”

David Streltsoff, chief revenue officer for quantitative trading firm Efficient Frontier, says the lack of BTC market action might simply be newer investors looking elsewhere for quick profits given the low returns bitcoin is putting out. “I don’t think bitcoin has lost its luster,” Streltsoff said. “Investors, at least in retail, are looking for the next DOGE and a mere 20% isn’t good enough anymore.” 

Bitcoin is down over 6% so far in April, according to spot data from Luxembourg-based exchange Bitstamp. “BTC holding support of around $54,000 is positive,” Streltsoff added. 

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Wednesday, trading around $2,723 and climbing 3.9% in 24 hours as of 21:00 UTC (4:00 p.m. ET). ETH has hit a new all-time high, with the record now standing at $2,743, according to CoinDesk 20 data.

The highest day for ether spot volumes in 2021 occurred last week, hitting $68 billion across major exchanges April 23, according to CoinDesk Research data. Bitcoin’s volumes that day were $88 billion, signalling ether is gaining some momentum on the world’s oldest cryptocurrency. 

Total value locked in the Ethereum ecosystem has crossed $64 billion for the first time, a fresh high as investors plow more money into DeFi.

“Ether prices follow total value locked,” said GSR’s Rosenblum. “ETH is much more correlated to DeFi even though BTC is technically DeFi, too.” As of press time, 9.9 million ETH is locked in DeFi, worth over $27.1 billion. Meanwhile, 155,748 BTC, worth $8.5 billion, is parked in various DeFi apps.

Neil Van Huis, director of institutional trading for crypto liquidity provider Blockfills, says ether’s infrastructure is a key reason traders are steadfastly interested in buying ether over bitcoin for the time being. 

“I just think the overall landscape for ether has improved greatly,” Van Huis told CoinDesk. The Ethereum blockchain “shook off the [initial coin offering] boom and bust, went through several bull/bear markets and the infrastructure has finally been laid for ETH to do what it was, hopefully, intended to do.”

Digital assets on the CoinDesk 20 are mixed Wednesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers:

Equities:

Commodities:

Treasurys:

The securities regulator announced Wednesday it was designating a longer deliberative period for the bitcoin ETF application, saying it needed to ensure it has “sufficient time” to evaluate the proposal. There are 10 active bitcoin ETF applications, including VanEck’s, and the agency is currently looking at three of them.

A bitcoin ETF could be key for mainstream adoption because it would be a regulated product allowing financial institutions and retail traders to gain exposure to the cryptocurrency without having to invest in it directly.

“The Commission designates June 17, 2021, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change,” states the filing, signed by Assistant Secretary J. Matthew DeLesDernier.

The SEC can take up to 240 days to determine whether it will approve or disapprove the ETF application. To date the agency has taken the full 240 days for most of the bitcoin ETF applications it has considered, and then rejected every application. 

Proponents believe 2021 may finally be the year a bitcoin ETF is approved in the U.S., citing the launch of several such products in Canada and the recent confirmation of apparently crypto-friendly regulator Gary Gensler as the chair of the SEC.

VanEck filed its ETF proposal at the end of 2020, with Cboe BZX filing a 19b-4 form formally announcing its intention to act as VanEck’s exchange partner earlier this year. 

The SEC is also looking at Kryptoin and WisdomTree’s bitcoin ETF applications. Other applicants, ranging from financial services giant Fidelity to former White House Communications Director Anthony Scaramucci’s new firm, await their own evaluations.

The securities regulator announced Wednesday it was designating a longer deliberative period for the bitcoin ETF application, saying it needed to ensure it has “sufficient time” to evaluate the proposal. There are 10 active bitcoin ETF applications, including VanEck’s, and the agency is currently looking at three of them.

A bitcoin ETF could be key for mainstream adoption because it would be a regulated product allowing financial institutions and retail traders to gain exposure to the cryptocurrency without having to invest in it directly.

“The Commission designates June 17, 2021, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change,” states the filing, signed by Assistant Secretary J. Matthew DeLesDernier.

The SEC can take up to 240 days to determine whether it will approve or disapprove the ETF application. To date the agency has taken the full 240 days for most of the bitcoin ETF applications it has considered, and then rejected every application. 

Proponents believe 2021 may finally be the year a bitcoin ETF is approved in the U.S., citing the launch of several such products in Canada and the recent confirmation of apparently crypto-friendly regulator Gary Gensler as the chair of the SEC.

VanEck filed its ETF proposal at the end of 2020, with Cboe BZX filing a 19b-4 form formally announcing its intention to act as VanEck’s exchange partner earlier this year. 

The SEC is also looking at Kryptoin and WisdomTree’s bitcoin ETF applications. Other applicants, ranging from financial services giant Fidelity to former White House Communications Director Anthony Scaramucci’s new firm, await their own evaluations.

The leading cryptocurrency is trading back and forth in the $53,900 to $55,700 range, having charted an impressive bounce from roughly $48,000 over the previous two days. 

The market is struggling to find direction, possibly due to caution ahead of the end of the Fed gathering. Investors will be waiting for the post-meeting statement and to see during the post-meeting press conference if Chairman Jerome Powell drops hints of an early scaling back of stimulus because of fears of mounting inflation. 

Data from the Federal Reserve Bank of St. Louis shows inflation expectations for the second half of the current decade reached a 30-month high of 2.25% on Tuesday. Inflation fears have also spread to the stock market and could soon translate into a higher consumer price index, as per a new report from Bank of America. 

Bitcoin may face selling pressure if the Fed turns hawkish (inclined to raise rates) and signals an early tapering of stimulus. “A tightening stance from the Fed might cause bitcoin to give away the weekly gains,” Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, said. 

The Fed has been buying $120 billion worth of bonds under its open-ended asset purchase program since March 2020 to thwart the coronavirus pandemic’s negative impact on markets and the economy. The central bank’s benchmark interest rate also stands at a record low of 0.25%. 

Financial assets and bitcoin have been significant beneficiaries of this ultra-easy monetary policy. Hence hints of early reversal may bring about a correction in asset prices. 

That said, analysts expect the Fed to maintain its easing (dovish) bias. 

“Rather than follow the lead of the Bank of Canada [BOC], which last week began cutting back on bond purchases and signaled a quicker time frame for the next interest rate increase, the Fed will most likely take an approach similar to the one the European Central Bank conveyed last Thursday. “It will maintain the policy as is, remind markets that it is willing to do even more should downside risks materialize,” Mohamed A. El-Erian, chief economic advisor at Allianz, noted in his Bloomberg column.

LMAX Digital’s Joel Kruger and Delta Exchange’s Balani also foresee the Fed keeping its dovish stance intact. “The Fed should continue with its accommodative stance despite transitory inflationary pressures,” Balani said. 

Recent weakness in the dollar index and Treasury yields also points to a low probability of the Fed following BOC’s footsteps. 

The dollar index, which gauges the greenback’s value against major fiat currencies, has dropped by 2.3% this month despite signs the U.S. economy is accelerating. The 10-year Treasury yield has shed 12 basis points, according to data source TradingView. 

Bitcoin’s recovery rally may pick up steam if the Fed maintains its easy-money policy, as is expected. “We don’t believe there will be any messaging concerning an earlier taper, and we think bitcoin will continue to be supported in this backdrop,” Kruger said. 

Also read: As Powell Heads to Fed Meeting, Inflation Data Can Only Get Worse

However, Stack Funds’ Matthew Dibb said he expects price consolidation even if the Fed maintains its current course. “From a technical view, bitcoin is lagging in its recovery since last week, with the majority of alternative cryptocurrencies charting stronger rallies,” Dibb said. “We caution traders that we may be stuck in the $50,000 to $60,000 range for the next few weeks.”

The leading cryptocurrency is trading back and forth in the $53,900 to $55,700 range, having charted an impressive bounce from roughly $48,000 over the previous two days. 

The market is struggling to find direction, possibly due to caution ahead of the end of the Fed gathering. Investors will be waiting for the post-meeting statement and to see during the post-meeting press conference if Chairman Jerome Powell drops hints of an early scaling back of stimulus because of fears of mounting inflation. 

Data from the Federal Reserve Bank of St. Louis shows inflation expectations for the second half of the current decade reached a 30-month high of 2.25% on Tuesday. Inflation fears have also spread to the stock market and could soon translate into a higher consumer price index, as per a new report from Bank of America. 

Bitcoin may face selling pressure if the Fed turns hawkish (inclined to raise rates) and signals an early tapering of stimulus. “A tightening stance from the Fed might cause bitcoin to give away the weekly gains,” Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, said. 

The Fed has been buying $120 billion worth of bonds under its open-ended asset purchase program since March 2020 to thwart the coronavirus pandemic’s negative impact on markets and the economy. The central bank’s benchmark interest rate also stands at a record low of 0.25%. 

Financial assets and bitcoin have been significant beneficiaries of this ultra-easy monetary policy. Hence hints of early reversal may bring about a correction in asset prices. 

That said, analysts expect the Fed to maintain its easing (dovish) bias. 

“Rather than follow the lead of the Bank of Canada [BOC], which last week began cutting back on bond purchases and signaled a quicker time frame for the next interest rate increase, the Fed will most likely take an approach similar to the one the European Central Bank conveyed last Thursday. “It will maintain the policy as is, remind markets that it is willing to do even more should downside risks materialize,” Mohamed A. El-Erian, chief economic advisor at Allianz, noted in his Bloomberg column.

LMAX Digital’s Joel Kruger and Delta Exchange’s Balani also foresee the Fed keeping its dovish stance intact. “The Fed should continue with its accommodative stance despite transitory inflationary pressures,” Balani said. 

Recent weakness in the dollar index and Treasury yields also points to a low probability of the Fed following BOC’s footsteps. 

The dollar index, which gauges the greenback’s value against major fiat currencies, has dropped by 2.3% this month despite signs the U.S. economy is accelerating. The 10-year Treasury yield has shed 12 basis points, according to data source TradingView. 

Bitcoin’s recovery rally may pick up steam if the Fed maintains its easy-money policy, as is expected. “We don’t believe there will be any messaging concerning an earlier taper, and we think bitcoin will continue to be supported in this backdrop,” Kruger said. 

Also read: As Powell Heads to Fed Meeting, Inflation Data Can Only Get Worse

However, Stack Funds’ Matthew Dibb said he expects price consolidation even if the Fed maintains its current course. “From a technical view, bitcoin is lagging in its recovery since last week, with the majority of alternative cryptocurrencies charting stronger rallies,” Dibb said. “We caution traders that we may be stuck in the $50,000 to $60,000 range for the next few weeks.”