Bitcoin has mostly traded in a tight, low-volume range Monday while some profit-taking from bitcoin into ether is appearing on the ETH/BTC charts.
- Bitcoin (BTC) trading around $26,822 as of 21:00 UTC (4 p.m. ET). Gaining 2.3% over the previous 24 hours.
- Bitcoinâ€™s 24-hour range: $25,759- $27,447 (CoinDesk 20)
- BTC very near its 10-hour and 50-hour moving averages on the hourly chart, a sideways signal for market technicians.
Bitcoinâ€™s price action has stagnated Monday, trading in a $27,000-$27,200 range for many hours, according to CoinDesk 20 data. The lack of movement follows a Sunday when bitcoin cracked an all-time high of $28,352, fueled by a bull run sparked on Dec. 25.Â
A bit of a respite is par for the course, according to over-the-counter trader Alessandro Andreotti. â€œI think itâ€™s just a minor retracement, a little pause after a week of all-time highs,â€ Andreotti told CoinDesk. â€œBTC is definitely still in bullish territory.â€
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After Sundayâ€™s run that saw over $4 billion in volume on major CoinDesk 20 exchanges, Mondayâ€™s spot trading tally is much lower, at $1.8 billion as of press time. â€œGiven the speed of the rise yesterday, especially after the last few daysâ€™ rally, a slight contraction is normal,â€ said David Lifchitz, chief investment officer of quant trading firm ExoAlpha.
â€œBitcoin continues on its strong upwards path with more retail investors now moving into bitcoin over the holiday break,â€ noted Jason Lau, chief operating officer of San Francisco-based cryptocurrency exchange OKCoin. However, flat spot volume may not be a trend heading into next year, according to Lau. â€œWith the [U.S. economic] stimulus package being signed, the appeal of bitcoin as a store of value could continue into 2021.â€
In the derivatives space, futures liquidations have helped to fuel bitcoinâ€™s recent price run. This is evident in the number of liquidations â€“ the equivalent of a margin call in traditional markets â€“ on BitMEX. Over the past three days more than $116 million in liquidations occurred, with shorts being favored as buy liquidations hit $65 million.Â
â€œAt this stage there is a clear lack of sellers as all the leveraged shorts are liquidated,â€ quant trading firm QCP Capital wrote in its Monday investor note. â€œThe bull story remains clear: Growing institutional adoption of BTC is driving price higher and is feeding the retail FOMO, which then extends across all of crypto.â€
Other analysts agree with QCP that bitcoinâ€™s price push is allowing other cryptocurrencies, particularly ether, to start getting more attention. â€œI think the BTC price slowdown is giving some breath for the altcoin season,â€ said Misha Alefirenko, founder of crypto market maker VelvetFormula. The ether futures market is trending back up after a record-high $2.2 billion in open interest lost some steam after Dec. 19.Â
However, the news CME will be getting into the ether futures game is a positive sign for continued institutional interest in crypto, according to OKCoinâ€™s Lau.
â€œEthereum has maintained the upwards trajectory alongside bitcoin, reaching its highest levels since May 2018,â€ said Lau. The CME Ethereum futures offering in February, â€œcould have a huge impact by exposing [ether] to more institutional investors.â€
ETH/BTC Goes Bull Mode
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday, trading around $732 and climbing 8% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
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The ETH/BTC trading pair, a common offering on most exchanges, has suddenly gone bullish Monday after a long bearish cycle. This pair indicates the strength of ether versus bitcoin. The bullish signal on the hourly charts, including a spike in volume on Coinbase, suggests traders are selling bitcoin for ether.
Some profit-taking from bitcoin into ether is the main culprit, according to Vishal Shah, an options trader and founder of derivatives venue Alpha5. Â â€œI think itâ€™s the spillover effects of BTC exhaustion,â€ Shah told CoinDesk. He also added it is likely hardcore crypto traders ekeing out more gains in this bull cycle pushing the ETH/BTC hourly chart up. â€œThis entire rally has been born of bitcoin, so [its] hard to see it simply shift gears. And if it does, itâ€™s probably not the same ilk of investor.â€
Digital assets on the CoinDesk 20 are mostly green Monday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
- cosmos (ATOM) + 9%
- cardano (ADA) + 8.5%
- bitcoin cash (BCH) + 7%
One notable loser:
- xrp (XRP) – 1.9%
- Asiaâ€™s Nikkei 225 ended the day climbing 0.74% as investors exuded optimism amid fresh U.S. stimulus and the administration of coronavirus vaccines.
- The FTSE 100 in Europe closed flat, in the green 0.10% as traders weighed a Brexit trade deal approval from U.K. lawmakers this week.
- The S&P 500 in the United States gained 0.80% as investors were in buying mode after President Trump signed the $900 billion coronavirus stimulus package into law.
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- Oil was down 1.3%. Price per barrel of West Texas Intermediate crude: $47.66.
- Gold was in the red 0.33% and at $1,872 as of press time.
- The 10-year U.S. Treasury bond yield was down Monday dipping to 0.928 and in the red 0.18%.