Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

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  • Bitcoin (BTC) is trading around $ 28,775 as of 9:00 PM UTC (4:00 PM ET). 7.3% increase in the last 24 hours.
  • Bitcoin’s 24-hour range: $ 26,796.90 to $ 28,969.90 (CoinDesk 20)
  • BTC above its 10-hour and 50-hour moving averages, a bullish signal for market technicians.

Another day, a new all-time high for Bitcoin, as the cryptocurrency changed hands according to the CoinDesk 20 and was up to $ 28,969.90.

Bitcoin’s price started around 5:00 PM UTC (12:00 PM ET) on Tuesday and has barely let off. In just 26 hours, it rose from $ 26,400 to $ 29,000.

According to analyst Alex Krüger, actions in the bond market have led to a surge in cryptocurrencies. “Prices fell in the 48 hours leading up to yesterday [Tuesday’s] Pump, ”he said to CoinDesk. On Monday, the 10-year US bond returned 0.950%. On Wednesday afternoon it was 0.926%.

Chris Thomas, Head of Digital Asset at Swissquote, described the action on Wednesday as a “strong market” and said the Bitcoin price had “risen due to the retail flow. We saw a few [institutional investors] but not too many, “added,” most of them are on vacation until next Monday. ”

Bitcoin volume, December 2020.

Source: CryptoCompare

And while Thomas said he expected the market to trade sideways this week, “the fact that it has risen higher for me suggests we might see a short-term pullback,” he said.

Read more: Bitcoin Prices in 2020: This is what happened

“Bitcoin is expanding its parabolic uptrend after closing a gap at the beginning of the holiday week,” said technical analyst Katie Stockton, managing partner at Fairlead Strategies. “The rally has no new signs of exhaustion from an overbought / oversold perspective and there is no longer any resistance to hold bitcoin back.”

Much like Swissquote’s Thomas, Stockton warns that a withdrawal is possible, and should that happen, “Monday’s void is likely to be filled in an abrupt reversal.”

Meanwhile, a string of bad news hit XRP as more exchanges announced plans to halt cryptocurrency trading. Genesis, owned by CoinDesk parent company DCG, announced that it will cease trading and lending to XRP. Cryptocurrency exchange Binance will cease XRP trading for its customers effective January 13th. The token was down 3.5% in the 24 hours before it was released.

The trader sees $ 5,000 for ETH through September

Ether, the second largest cryptocurrency by market capitalization, made strong gains on Friday, trading at around $ 750. This represents a 3.5% increase in 24 hours from 9:00 PM UTC (4:00 PM ET).

Despite a multi-year high, trading in ether on Wednesday was easier than average. The eight exchanges tracked on CoinDesk 20 traded ether for just $ 618 million, compared to the previous 7-day average of $ 726 million.

Ether Volume, December 2020.

Source: CryptoCompare

However, at least one trader has their sights set on an amazing rally in the coming months. On Deribit, the largest crypto options exchange, someone bought 153 contracts from September 2021 on a strike of $ 5,000 for a premium of around $ 25 each. That means the trader has bet about $ 3,825 that the ether will rebound seven times over the next nine months. Calls give the owner the right, but not the obligation, to buy the underlying asset (in this case, ether) at a set price on a set date.

Prices don’t have to be close to $ 5,000 for the trader to make a profit. A mere spike in volatility, or even a relatively modest rally, could increase the now slim probability that the options are in the money, albeit by a very small percentage. Still, that might be just enough for the bet to pay off. As of now, however, it has the same risk profile as a lottery scratch-off game.

Other markets

The digital assets of CoinDesk 20 were mixed on Monday.

Notable Winners as of 9:00 PM UTC (4:00 PM ET):

  • Orchid (OXT) + 2%
  • Bitcoin Cash (BCH) + 2%
  • Litecoin (LTC) + 2%
  • Chain link (LINK) -2.2%
  • they (EOS) – 3%
  • Star (XLM) – 3%
  • Japan: Nikkei 225: 27,444.17 (-123.98 or -0.45%)
  • UK: FTSE 100: 6,555.82 (-46.83 or -0.71%)
  • USA: S&P 500: 3,732.04 (+ 5.00 or + 0.13%)
  • Oil rose 0.6%. Price per barrel of West Texas Intermediate Crude: $ 48.29
  • Gold was in the green, up 0.7%, at $ 1,896.40 at press time.
  • The US 10-year Treasury yield fell to 0.926% on Monday.