Market Wrap: Bitcoin Breaks $34K as Ether Futures Interest Jumps $350M in a Day

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Above average spot volume, even in the last month, is helping to drive Bitcoin price higher at a time when traders are rapidly investing in ether futures to open in 2021.

  • Bitcoin (BTC) starts trading at $ 33,987 as of 9:00 PM UTC (4:00 PM ET). Gain of 8.9% in the last 24 hours.
  • Bitcoin’s 24-hour range: $ 29,986 to $ 34,220 (CoinDesk 20)
  • BTC is well above its 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.

Bitcoin trading on Bitstamp since January 2nd.

Source: TradingView

Bitcoin’s price rose on Tuesday after reversing a four-hour sell-off around 6:00 a.m. UTC (1:00 a.m. CET). This has steadily increased to $ 34,220 at press time.

Continue reading: Bitcoin bounces back above $ 31,000 after falling on Monday

Bitcoin has expanded its already steep upward trend to new all-time highs, ”said Katie Stockton, technical analyst for Fairlead Strategies. “The signs of exhaustion that emerged in December have been absorbed by a brief period of consolidation and there are no active overbought sell signals.”

In the five days of 2021, the world’s oldest cryptocurrency is up over 16%.

Spot Bitcoin Performance on Bitstamp in 2021.

Source: TradingView

Stockton still sees “support”, the floor price on which traders buy, much lower than the current spot price.

“Initial support is below $ 25,000, which suggests continued daily volatility,” she said. Since December 31st, Bitcoin’s realized volatility has increased again from 55.5% to 63.3% on Monday, an increase that is not uncommon lately but is still being followed by traders.

Bitcoin’s 30-day volatility over the past year.

Source: Shuai Hao / CoinDesk Research

“Technically things have been overbought for a while,” said Andrew Tu, a senior executive at Quant trading company Efficient Frontier. “The general trend is still up and this is unlikely to change, although the pace may not be what it was during the holiday season.”

Spot bitcoin volumes look pretty robust; Monday was the busiest day on the eight CoinDesk 20 exchanges last month at over $ 6.6 billion. Tuesday’s spot volume also looks good at $ 4.2 billion at press time. Last month, the average volume was $ 2.3 billion per day.

Spot bitcoin volume on major exchanges over the past month.

Source: Shuai Hao / CoinDesk Research

“If Bitcoin continues to recover at the current rate, we could see a price of $ 54,000 on Valentine’s Day,” said Nicholas Pelecanos, trading director at blockchain ecosystem provider NEM. “We could see a price higher than this by the end of the first quarter. $ 74,000 is on my radar too. “

Continue reading: JPMorgan predicts that Bitcoin price could soar above $ 146,000 in the long run

However, Pelecanos is still foreseeing a possible withdrawal from those high forecast prices. “I feel like a $ 54,000 pullback would weigh down Bitcoin price to consolidate around $ 35,000,” Pelecanos said.

It may be hard to remember, but less than a year ago, Bitcoin hit a low of $ 3,867 in traditional markets and crypto markets during the 2020 sell-off, according to CoinDesk 20 data.

Historical spot bitcoin price last year.

Source: CoinDesk 20

“Based on previous cycles, we could be extremely bullish for about a year,” Pelecanos said. “In all cycles, the crash comes from the madness of the crowd. There will be no catalyst news story, the market will just run out of buyers. “

Aether futures piping hot to open in 2021

The second largest cryptocurrency by market cap, Ether (ETH), rose Tuesday, trading at $ 1,095 and rising 7.3% in 24 hours from 9:00 PM UTC (4:00 PM ET).

Continue reading: While the Bitcoin rally pauses, DeFi remains amazing

The ether futures market continues to see amazing gains in the first week of trading in 2021. As of Sunday, open interest (OI) for Ether futures in major venues has grown by $ 350 million to a total of $ 2.95 billion, with Binance by far leading the way with $ 734 million in open interest alone.

Ether futures generate interest in important derivatives.

Source: Skew

According to Vishal Shah, founder of the derivatives venue Alpha5, the record-breaking open interest could easily wear off. “It’s just leverage. It really wipes out when the funding gets high and the market is looking for a story as soon as it moves forward, ”he told CoinDesk.

Brian Mosoff, executive director of investment firm Ether Capital, said the spot price of Ether still had room for growth and the growth in futures was a sign of that.

“ETH is still below its all-time high, and many believe that given the positive news in the second half of 2020, there is still room for growth,” said Mosoff. “Ether futures are at an all-time high as market sentiment has changed drastically in the past few months. I would attribute it to the successful start of ETH2, macroeconomic conditions looking for alternative asset classes to hedge impending inflation and a resilient ecosystem. “

Other markets

Digital assets on CoinDesk 20 are mostly green on Tuesday. Notable Winners as of 9:00 PM UTC (4:00 PM ET):

  • Oil rose 5.6%. Price per barrel of West Texas Intermediate Crude: $ 49.98.
  • Gold was in the green at 0.32% and at $ 1,948 at press time.
  • The US 10-year Treasury yield rose to 0.948 on Tuesday and is still 3.8% in the green.

The CoinDesk 20: The assets that matter most to the market