Commodities, Bitcoin, Ether, Equities, Market Wrap

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.
  • Bitcoin’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.
Commodities, Bitcoin, Ether, Equities, Market Wrap
Bitcoin trading on Bitstamp since Dec. 25.
Source: TradingView

Bitcoin’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. 

A bit of a respite is par for the course, according to over-the-counter trader Alessandro Andreotti. “I think it’s just a minor retracement, a little pause after a week of all-time highs,†Andreotti told CoinDesk. “BTC is definitely still in bullish territory.â€

Read More: Whale Sightings Become Scarce, Removing Downward Pressure on Bitcoin

After Sunday’s run that saw over $4 billion in volume on major CoinDesk 20 exchanges, Monday’s spot trading tally is much lower, at $1.8 billion as of press time. “Given the speed of the rise yesterday, especially after the last few days’ rally, a slight contraction is normal,†said David Lifchitz, chief investment officer of quant trading firm ExoAlpha.

Commodities, Bitcoin, Ether, Equities, Market Wrap
Bitcoin spot volume on eight major exchanges.
Source: Shuai Hao/CoinDesk Research

“Bitcoin continues on its strong upwards path with more retail investors now moving into bitcoin over the holiday break,†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. “With 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 bitcoin’s recent price run. This is evident in the number of liquidations – the equivalent of a margin call in traditional markets – on BitMEX. Over the past three days more than $116 million in liquidations occurred, with shorts being favored as buy liquidations hit $65 million. 

Commodities, Bitcoin, Ether, Equities, Market Wrap
BitMEX bitcoin liquidations the past three days.
Source: Skew

“At this stage there is a clear lack of sellers as all the leveraged shorts are liquidated,†quant trading firm QCP Capital wrote in its Monday investor note. “The 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 bitcoin’s price push is allowing other cryptocurrencies, particularly ether, to start getting more attention. “I think the BTC price slowdown is giving some breath for the altcoin season,†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. 

Commodities, Bitcoin, Ether, Equities, Market Wrap
Ether futures open interest the past three months.
Source: Skew

However, the news CME will be getting into the ether futures game is a positive sign for continued institutional interest in crypto, according to OKCoin’s Lau.

“Ethereum has maintained the upwards trajectory alongside bitcoin, reaching its highest levels since May 2018,†said Lau. The CME Ethereum futures offering in February, “could 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).

Read More: Cover Protocol Attack Perpetrated by ‘White Hat,’ Funds Returned

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.

Commodities, Bitcoin, Ether, Equities, Market Wrap
The ETH/BTC trading pair on Coinbase the past month.
Source: TradingView

Some profit-taking from bitcoin into ether is the main culprit, according to Vishal Shah, an options trader and founder of derivatives venue Alpha5.  “I think it’s the spillover effects of BTC exhaustion,†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. “This entire rally has been born of bitcoin, so [its] hard to see it simply shift gears. And if it does, it’s probably not the same ilk of investor.â€

Other markets

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%
  • Asia’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.

Read More: XRP Is a Crypto Asset in Japan, Not a Security, Ripple Partner SBI Claims

  • 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.

Treasurys:

  • The 10-year U.S. Treasury bond yield was down Monday dipping to 0.928 and in the red 0.18%.
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