Bitcoin is sticking to its range for now.

While it may sometimes seem that the leading cryptocurrency is getting ready to make a strong move upwards or going back for the lows again, it is simply range-bound and boring.

The latest down move came as Elon Musk yet again tweeted about Bitcoin and financial regulators in China’s southern Hainan province cautioned investors against illegal fundraising schemes involving blockchain and crypto.

In addition, financial and payment institutions are asked not to directly or indirectly provide services related to virtual currencies, and trading platforms should not provide pricing, trading, or other intermediary services.

The market is simply at rest for now. Retail demand for long positions continues to decline with the futures-spot spread narrowing on BitMEX and other crypto platforms, getting closer to the level on the CME.

“In mature, liquid markets, institutional and sophisticated investors search for various arb opportunities,” said Kelly Pettersen, head of business development at Skew, now acquired by Coinbase.

“Applying this same strategy in crypto, over time, means the market and the trade will continue to get more popular, and the spread will narrow.”

A lot of hedging is actually going on right now, as seen in the cost of one-month puts on Bitcoin rising above the price of comparable calls.

According to crypto market participants, the fact that fear went down to March 2020 levels, high leverage has been wiped out, funding rate has normalized, and the past cycles had seen a similar deep rut amidst the bull market, the bull market seems to be intact and bottom in.

However, according to JPMorgan analysts, Bitcoin’s medium-term fair value is between $24,000 and $36,000. Also, the crash has badly weakened institutional demand, which held off buying the dip and will keep prices down, for now. Strategist Nikolaos Panigirtzoglou in the bank’s recent report said,

“There is little doubt that the boom and bust dynamics of the past weeks represent a setback to the institutional adoption of crypto markets and, in particular, of Bitcoin and Ethereum. We note that the mere rise in volatility, especially relative to gold, is an impediment to further institutional adoption as it reduces the attractiveness of digital gold vs. traditional gold in institutional portfolios.”

According to the analysts, the failure to break the $60k threshold has likely been a significant factor in the correction in pushing CTAs (commodity trading advisors) and other momentum-based investors to cut positions.

Bitcoin can see further losses as much as to $26k level before longer-term momentum would signal capitulation, noted Panigirtzoglou. But such volatility isn’t anything new for crypto people who have been experiencing it from the beginning.

Despite this, the biggest crypto exchange in the US, Coinbase’s Q2, remains on track as Coinbase CFO Alesia Haas said, “the momentum that we are seeing is continuing.”

“There's a lot of interest in crypto. We shared it on our first earnings call just recently, with the momentum we saw in Q1 had continued into Q2, and we are optimistic at this point that we are going to see similar levels of excitement in volume on our platform that we saw in the first quarter.”

In the meantime, Russia said that it would eliminate the dollar from its oil fund to reduce vulnerability to Western sanctions.

“Like the central bank, we have decided to reduce investments of the NWF in dollar assets,” said Finance Minister Anton Siluanov. “Geopolitics does play a role,” he said, adding, “We’re trying to protect our investments.”

Just two weeks before President Vladimir Putin holds his first summit meeting with U.S. counterpart Joe Biden, the National Wellbeing Fund will shift its dollar holdings into euros, yuan, and gold.

Elsewhere, Russia’s central bank governor, Elvira Nabiullina, said that digital currencies would be the future of “our financial system because it correlates with this development of the digital economy.”

Back in October, Moscow published a consultation paper on a digital ruble and aimed to have its prototype ready by the end of this year. Pilots and trials could start next year, Nabiullina told CNBC.

According to a former U.S. Treasury official, Michael Greenwald, this could be a concern for the US.

“What alarms me is if Russia, China, and Iran each create central bank digital currencies to operate outside of the dollar and other countries follow them,” he said. “That would be alarming.”

Meanwhile, Russia’s biggest online bank Tinkoff wants to offer crypto trading to its clients, but “There’s no mechanism for us to offer that product to them in Russia at the moment because the central bank has got this very tough position,” said CEO Oliver Hughes.

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