Bitcoin is sideways Tuesday, with little price action. However, traders seem to be jumping into decentralized finance to maximize their crypto yield.
- Bitcoin (BTC) trading around $15,345 as of 21:00 UTC (4 p.m. ET). Slipping 0.30% over the previous 24 hours.
- Bitcoinâ€™s 24-hour range: $15,092-$15,471.
- BTC close to its 10-day and 50-day moving averages, a flat or sideways signal for market technicians.
Bitcoinâ€™s price was flat Tuesday, sticking to a $15,000-$15,400 range and at $15,345 as of press time. It was a bit of a respite after Mondayâ€™s $1,000 price move in a span of hours.
Read More: 3 Reasons Bitcoin Has Rallied Over 60% in Just Two Months
Funding rates have ticked up on major derivatives venues, a sign more traders are looking for long leverage.
â€œIt is likely that the sharp bounces in BTC price yesterday and on Saturday were retail led â€“ with the perpetual swap funding spiking for the first time since September,â€ quantitative trading firm QCP Capital wrote in its Tuesday investor note. â€œOne reason for the overall strength and stickiness of the rally in the last two months has been the absence of retail over-leverage, as evidenced by the flat funding up till now.â€
Mostafa Al-Mashita, executive vice president of trading for Global Digital Assets, is keeping an eye on bitcoinâ€™s correlation with the S&P 500 index as a way to gauge fundamental market news affecting the crypto market.
â€œWe saw positive momentum from the Pfizer announcement, with a loss of S&P 500 correlation to bitcoin price action,â€ Al-Mashita said. â€œSupport will be established over the next couple of days before rebounding to continue the bullish trend.â€
After a slight dip last week, bitcoinâ€™s correlation to the key U.S. index cropped back up on Monday.
â€œThe last month has been extremely bullish for digital assets,â€ said Brian Mosoff, chief executive officer of investment firm Ether Capital. â€œVarious institutions are committing to new products and R&D and giving a new set of investors more comfort that the space is maturing.â€
Read More: Billionaire Investor Druckenmiller Says He Owns Bitcoin in CNBC Interview
Year-to-date, bitcoin has more than doubled and over the past month, the worldâ€™s oldest cryptocurrency is up over 35%.
With the sideways price performance Tuesday, a number of traders appear to be moving crypto into decentralized finance, or DeFi, for yield-generating opportunities. According to DeFi Pulse, 168,111 BTC, worth $2.5 billion as of press time, is generating yield in various Ethereum-based protocols.
â€œBTC is digesting the recent confusing macro and political events and consolidating before its next move,â€ said Jean-Marc Bonnefous, managing partner of investment firm Tellurian Capital. â€œWe are seeing the rotation from BTC to DeFi in full swing now, which is typical of traders redeploying capital to higher yielding assets.â€
DeFi value locked at a high
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Tuesday trading around $450 and climbing 0.70% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
The amount of cryptocurrency â€œlockedâ€ or held in Ethereum-based DeFi protocols is at a record Tuesday. Over $12.8 billion is currently being held in DeFi, the highest it has ever been according to data aggregator DeFi Pulse.
Ether Capitalâ€™s Mosoff says many investors have profited from rising crypto prices and are looking to find additional gains in the DeFi market.
â€œTotal value locked in DeFi is hitting all-time highs likely due to the price increase across all crypto assets and the continued positive sentiment in the space alongside more certainty in the political arena,â€ Mosoff told CoinDesk.
Digital assets on the CoinDesk 20 are mixed Tuesday. Notable losers as of 21:00 UTC (4:00 p.m. ET):
- algorand (ALGO) + 8.2%
- 0x (ZRX) + 7.7%
- chainlink (LINK) + 4%
- bitcoin cash (BCH) – 3.1%
- litecoin (LTC) – 1.7%
- cosmos (ATOM) – 1.2%
Read More: Volume Surge Brings 25% Turnover to â€˜CoinDesk 20â€™
- The Nikkei 225 ended the day in the green 0.26%, boosted by gains in Yamaha Motor Co Ltd., which jumped 21% on better-than-expected earnings.
- Europeâ€™s FTSE 100 closed up 1.8% as investors plowed money into cheap stocks amid optimism a coronavirus vaccine is closing in on regulatory approval.
- In the United States the S&P 500 was flat, in the red 0.10%, weighed down by a sell-off in major tech stocks such as Amazon, Zoom and Netflix.
- Oil was up 3.8%. Price per barrel of West Texas Intermediate crude: $41.34.
- Gold was in the green 0.58% and at $1,872 as of press time.
- U.S. Treasury bond yields all climbed Tuesday. Yields, which move in the opposite direction as price, were up most on the 2-year, jumping to 0.183 and in the green 3.4%.