Higher-than-average spot volume, even for the past month, is helping push bitcoinâ€™s price upward at a time when traders are plowing into ether futures at a quick pace to open 2021.
- Bitcoin (BTC) trading around $33,987 as of 21:00 UTC (4 p.m. ET). Gaining 8.9% over the previous 24 hours.
- Bitcoinâ€™s 24-hour range: $29,986-$34,220 (CoinDesk 20)
- BTC well above its 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.
Bitcoinâ€™s price made gains Tuesday after a four-hour sell-off was reversed around 06:00 UTC (1 a.m. ET). That led to a steady climb to as high as $34,220 as of press time.
Read More: Bitcoin Bounces Back Above $31K After Mondayâ€™s Drop
â€œBitcoin has extended its already-steep uptrend to new all-time highs,â€ said Katie Stockton, a technical analyst for Fairlead Strategies. â€œThe signs of exhaustion that appeared in December were absorbed via a brief consolidation phase, and there are no active overbought â€˜sellâ€™ signals.â€
So far in the five days of 2021, the worldâ€™s oldest cryptocurrency is up over 16%.
Stockton still sees â€œsupport,â€ the price floor where traders step to buy, much lower than the current spot price.Â
â€œInitial support is below $25,000, which hints at a continued day-to-day volatility,â€ she said. Since Dec. 31, bitcoinâ€™s realized volatility has been creeping back up, from 55.5% to 63.3% Monday,Â a rise not entirely uncommon of late but nonetheless something traders track.
â€œOn a technical basis, things have been overbought for a while,â€ said Andrew Tu, an executive for quant trading firm Efficient Frontier. â€œThe overall trend is still upwards and this seems unlikely to change, though the pace may not be like it was during the holiday season.â€
Spot bitcoin volumes are looking quite robust; Monday was the highest-volume day on the eight CoinDesk 20 exchanges in the past month, at over $6.6 billion. Tuesdayâ€™s spot volume is also looking healthy, at $4.2 billion as of press time. In the past month, volumes have averaged $2.3 billion per day.
â€œIf bitcoin continues to rally at its current rate, I believe we could see a price of $54K around Valentineâ€™s Day,â€ said Nicholas Pelecanos, head of trading for blockchain ecosystem provider NEM. â€œWe could see a higher price than this by the end of Q1; $74K is also on my radar.â€
Read More: JPMorgan Predicts Bitcoin Price Could Rise Over $146K in Long Term
However, Pelecanos still envisions an eventual retreat from those lofty forecasted prices. â€œI have the sense a pull back from $54K would leave the bitcoin price to consolidate around $35K,â€ Pelecanos said.Â
It may be hard to remember but less than a year ago during 2020â€™s sell-off in traditional and crypto markets, bitcoin hit a low of $3,867, according to CoinDesk 20 data.
â€œBased on previous cycles we could be in for a year or so of extreme bullishness,â€ Pelecanos said. â€œWith all cycles, the crash comes from the madness of the crowd. There wonâ€™t be a catalyst news story, the market will just run out of buyers.â€
Ether futures boiling hot to open 2021
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Tuesday, trading around $1,095 and climbing 7.3% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
Read More: As Bitcoin Rally Pauses, DeFi Keeps Astounding
The ether futures market continues to see staggering gains in the first trading week of 2021. Since Sunday, ether futures open interest (OI) on major venues has grown $350 million to $2.95 billion total, with Binance by far leading the way at $734 million in open interest alone.
The record-high open interest could easily simmer down, according to Vishal Shah, founder of derivatives venue, Alpha5. â€œItâ€™s just leverage. It wipes itself out a lot when financing gets high and the market is looking for a story once it races ahead,â€ he told CoinDesk.Â
Brian Mosoff, chief executive of investment firm Ether Capital, said etherâ€™s spot price still has room to grow, and the growth of futures is a sign of that.
â€œETH is still below the all-time high, and many believe with all the positive news in the latter half of 2020 it still has room to grow,â€ Mosoff said. â€œEther futures are at an all-time high as the market sentiment has drastically shifted in the last few months. Iâ€™d attribute it to the successful launch of ETH2, macro conditions looking to alternative asset classes to hedge pending inflation and a robust ecosystem.â€
Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
- stellar (XLM) + 23.4%
- algorand (ALGO) + 19.3%
- cardano (ADA) + 19%
- tron (TRX) – 4.2%
- xrp (XRP) – 2%
- Asiaâ€™s Nikkei 225 ended the day slipping 0.37%, led lower by a slump in shares of packaging container manufacturing company Toyo Seikan, which fell 3.6%.
- The FTSE 100 in Europe closed in the green 0.61%, boosted after British retailer Next jumped 8% on better-than-expected December numbers.
- The S&P 500 in the United States gained 0.50% as investors expressed optimism about oil prices up over 5% and some measure of government policy certainty after Tuesday’s Georgia Senate run-off election.
- Oil was up 5.6%. Price per barrel of West Texas Intermediate crude: $49.98.
- Gold was in the green 0.32% and at $1,948 as of press time.
- The 10-year U.S. Treasury bond yield climbed Tuesday jumping to 0.948 and in the green 3.8%.