Bitcoin was gaining amid positive institutional and retail adoption signs as the amount of crypto locked in Uniswap signals DeFi continues to be more just than a fad.
- Bitcoin (BTC) trading around $16,154 as of 21:00 UTC (4 p.m. ET). Gaining 2.9% over the previous 24 hours.
- Bitcoinâ€™s 24-hour range: $15,454-$16,186
- BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
Bitcoin was trending upward Thursday, continuing a direction that started Wednesday. The price per 1 BTC was able to hit as high as $16,186, according to CoinDesk 20 data. However, Guy Hirsch, managing director for U.S. at multi-asset brokerage eToro, cautions choppy waters might be ahead.Â
â€œBitcoinâ€™s struggle to consolidate above the $16,000 price level can likely be attributed to a number of factors including profit taking and capital rotation into some of the small-cap digital assets that have been recently surging,â€ Hirsch said. â€œIf bitcoin can establish a base in the low-$16,000 range, there isnâ€™t much resistance on the path to $17,000 and beyond.â€
Jason Lau, chief operating officer of San Francisco-based cryptocurrency exchange OKCoin, echoed the sentiment.
â€œBitcoin cleared $16,000 for the first time in three years, confirming the existing bullish uptrend,â€ Lau said. â€œWith minimal resistance until $20,000, itâ€™s hard to tell how the next few weeks will trade into year end, but signs are positive.â€
Read More: PayPal Removes Waitlist, Boosts Weekly Crypto Purchase Limit to $20K
Powerfully positive fundamentals in both institutional and retail adoption has Lau bullish.
â€œStrong institutional interest â€“ BTC futures open interest is at all-time highs â€“ and incoming retail flow â€“ PayPal opened up crypto buys to all U.S. users today â€“ is providing continued fuel for this rally,â€ Lau told CoinDesk.
Bitcoin futures open interest crossed $8 billion on major venues Wednesday, the highest data aggregator Skew has on record.
â€œAggregate bitcoin futures open interest continues to rise and, more importantly, it is not just the unregulated venues that are seeing this growth but also [open interest] on the CME is within touching distance of the $1 billion mark,â€ noted Denis Vinokourov, head of research at crypto brokerage Bequant. Total CME open interest for Wednesday was $912 million, according to Skew.Â
Read More: 98% of Bitcoinâ€™s â€˜Unspent Outputsâ€™ Are Worth More Than When Made
Spot bitcoin volume has also been strong Thursday. It was close to $1 billion as of press time, much higher than the past monthâ€™s $378 million average daily volume.
Another trend to watch: How decentralized exchanges (DEXs) and decentralized finance (DeFi) impact the bitcoin market during this price surge. â€œThe bulls are in charge of this trend and, as the old saying goes, do not fight the trend,â€ said Bequantâ€™s Vinokourov. â€œWith top DEX/DeFi venues such as Uniswap and Sushi trading cheap on price/sales ratio, it would not be surprising for them to lead to another wave of capital inflow into small- and mid-cap assets.â€ A price/sales ratio is common in valuing stocks, and a low ratio generally indicates a good buy.
â€œLarge-cap assets (such as bitcoin) may be leading the charge now, but that will not stop the hunt for yield trade,â€ Vinokourov added.
Uniswap crosses $3 billion locked
Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Thursday, trading around $458 and slipping 1.6% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
Read More: Ethereumâ€™s Hard Fork Was Trying to Prevent the Very Disruption It Caused
The amount of cryptocurrency â€œlockedâ€ in the DEX Uniswap crossed $3 billion Wednesday. Crypto investors place assets in smart contracts such as Uniswapâ€™s to provide liquidity and, in turn, gain profits, or yield, for doing so in the form of the fees traders pay to use the DEXâ€™s liquidity.Â
The total locked slipped a bit Thursday but was still hovering around $3 billion as of press time. Brian Mosoff, chief executive officer of investment firm Ether Capital, said this metric shows that despite some calling DeFi a fad, itâ€™s here to stay.Â
â€œMany skeptics from traditional finance and the crypto community were quick to attribute the summer high trade volume on Uniswap to nothing more than yield farming and pump and dumps,â€ Mosoff told CoinDesk. â€œNow that much of that activity has simmered, Uniswap crossing this new milestone is further proof that DeFi and [automated market makers] are here to stay.â€
Digital assets on the CoinDesk 20 are red Thursday. Notable losers as of 21:00 UTC (4:00 p.m. ET):
- kyber network (KNC) – 6.4%
- algorand (ALGO) – 6%
- orchid (OXT) – 4.7%
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- The Nikkei 225 ended the day in the green 0.68%, boosted by news that foreign inflows into Japanâ€™s stock market hit $10 billion in the past week.
- Europeâ€™s FTSE 100 closed in the red 0.68% as positive sentiment regarding a coronavirus vaccine lost steam.
- The S&P 500 fell 1.4% as increasing numbers of coronavirus cases in the United States led investors to hit the sell button amid continuing economic uncertainty.
- Oil was down 1.1%. Price per barrel of West Texas Intermediate crude: $40.92.
- Gold was in the green 0.54% and at $1,875 as of press time.
- The 10-year U.S. Treasury bond yield fell Thursday dipping to 0.883 and in the red 10.2%.