Market Wrap: Bitcoin Bumps to $38.6K While DeFi Exchanges Hit $50B

Analysts believe Elon Musk’s call for crypto drove Bitcoin price higher at a time when decentralized exchanges are seeing record levels of trading volume on the Ethereum network. However, excessive fees could dampen this.

  • Bitcoin (BTC) is trading at around $ 34,616 as of 9:00 PM UTC (4:00 PM ET). Climbing 5.9% in the last 24 hours.
  • Bitcoin 24-hour range: $ 31,984 to $ 38,566 (CoinDesk 20)
  • BTC well above the 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.

Bitcoin trading on Bitstamp since January 26th.

Source: TradingView

Bitcoin’s price rose massively on Friday. Within one hour, starting at 9:00 UTC (4:00 a.m. CET), the world’s oldest cryptocurrency gained 11%, rising from $ 33,377 to $ 37,113, according to CoinDesk 20 data. Over the next five hours, Bitcoin hit a 24-hour high of $ 38,566 before increased sell orders hit the market. The price per 1 BTC was $ 34,616 at the time of going to press.

Continue reading: Kraken, Coinbase suffer from market volatility

Analysts point to serial entrepreneur Elon Musk’s legendary social media habits as a catalyst for Bitcoin’s Friday price pop. “Elon’s ‘Bitcoin’ logo, which was added to his Twitter feed, drove us to an aggressive increase,” said Chris Thomas, Head of Digital Assets at Swissquote Bank. “His comments triggered huge buy stop losses on Binance and probably on the other Asian exchanges as well, as leveraged traders had to close their short positions.”

Continue reading: Musk-accelerated Bitcoin price hike results in $ 387 million liquidation in shorts

According to aggregator Bybt, total liquidation across the crypto market in the past 24 hours was the highest in three months at over $ 850 million. Liquidations are the crypto equivalent of a margin call: if a leverage trader’s position moves against price, they are automatically bought or sold to wipe out potential liabilities.

Liquidations long (green) and short (red) with BTC price (orange).

Source: Bybt

“The red retreat is absolutely natural considering how much we’ve moved,” added Swissquote’s Thomas. “We’ll likely find a new base – maybe with $ 35,000 backing – and trade a little higher sideways, assuming there’s no more news.”

Historical Bitcoin price for the last week.

Source: CoinDesk 20

Some good news for brokers: Crypto spot volume rose to $ 8.7 billion on Friday at press time. This is the second-highest reading in the past month according to the eight USD / BTC exchanges on the CoinDesk 20 stocks.

Spot volumes on major CoinDesk 20 exchanges (Shuai Hao / CoinDesk)

Source: CryptoCompare

Before the musk applications, the crypto market had been in the doldrums. “Investors focused on other major events like Profits and The [Federal Reserve]”Remarked David Russell, vice president of market intelligence for TradeStation trading platform.” They would have returned to crypto regardless of the institutional adoption trend, but Musk lit a fire under their feet. “

Long leverage funding rates are rising to levels not seen since Bitcoin’s record high on Jan. 8, when the price hit $ 41,962, according to CoinDesk 20 data. It is a sign that traders are encouraged by the short liquidations to get some long trades going.

Bitcoin exchanged funding at major venues last month.

Source: Skew

It will be interesting to see how Bitcoin behaves on the weekend as crypto never sleeps. The main stock indices on Friday are colored red. Could traders jump into cryptocurrency markets to find weekend opportunities?

“This has been a tremendous week for retail across multiple asset classes,” said James Putra, director of product strategy at Tradestation. “With most of the other asset classes closing later today, we’re excited to see whether the crypto markets will benefit from the excitement for retail around the clock.”

DEX volume reached a monthly volume of $ 50 billion in January

Ether (ETH), the second largest cryptocurrency by market capitalization, rose around $ 1,348 on Friday and rose 0.81% in a 24-hour period at 9:00 PM UTC (4:00 PM ET).

According to data aggregator Dune Analytics, monthly DEX (Decentralized Exchange) volumes for major projects in the Ethereum ecosystem have exceeded $ 50 billion.

First up is the long-standing Bellwether Uniswap, with 23.3 billion US dollars in January, almost half of the total volume. Uniswap is followed by $ 10 billion from SushipSwap, the rival of the smart contract fork, and $ 5.8 billion for the stable-coin exchange curve. I trade with DEXs a lot. They have deeper liquidity and are less slippery than traditional exchanges, ”said Michael Gord, CEO of trading company Global Digital Assets.

Decentralized exchange volume in the last two years.

Source: Dune Analytics

However, Peter Chan, head trader of the quantitative firm OneBit Quant, warned that the centralized exchanges (CEX) will continue to exist despite the record volume at DEX. “This is remarkable and I’m excited about the development of DeFi,” Chan told CoinDesk, referring to the decentralized funding. “But compared to the volumes of a CEX, there is still a long way to go.”

According to CoinGecko, the volume on the Binance central exchange for the last 24 hours at the time of going to press was $ 34 billion.

Chan noted that DEX fees can also fluctuate. “The price of gas will still be a big problem for DEXs. For small businesses in particular, gas charges could represent up to 20% to 30% of the trade. “

Other markets

The digital assets of CoinDesk 20 are mixed on Friday and mostly higher. Notable Winners as of 9:00 PM UTC (4:00 PM ET):

Additionally, meme-focused cryptocurrency Dogecoin (DOGE), which is not currently part of CoinDesk 20, has seen its price increase over 120% in the past 24 hours, largely due to the high level of activity on social media.

Continue reading: Dogecoin will become the most talked about crypto on Twitter when the price goes up

  • Oil rose 0.20%. Price per barrel of West Texas Intermediate Crude: $ 52.18.
  • Gold was flat, in the green 0.09%, at $ 1,843 at press time.
  • The 10-year US Treasury yield rose to 1.077 on Friday and is still 2.8% in the green.

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