Market Wrap: Bitcoin drops to USD 34.four,00zero because the well-known DeFi Token Trounce ETH
Bitcoin slipped to below average quantities on Friday through 2021. In other news, while BTC and ETH are on the rise this year, some DeFi tokens are doing even better.
- Bitcoin (BTC) is trading around $ 35,610 as of 9:00 PM UTC (4:00 PM ET). 9.4% down in the last 24 hours.
- Bitcoin 24-hour range: $ 34,425 to $ 39,673 (CoinDesk 20)
- BTC below the 10-hour and 50-hour moving averages on the hourly chart, a bearish signal for market technicians.
Bitcoin trading on Bitstamp since January 12th.
Bitcoin price fell on Friday, a steady decline over the past 24 hours, with the world's oldest cryptocurrency bottoming out at $ 34,425 before rising to $ 35,610 at press time.
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“The price was $ 40,000. Now we're waiting for a rollback to US $ 34,000, ”said Constantin Kogan, partner at the crypto investment firm Wave Financial. "Most likely, the next possible low will be at least $ 26,000."
That's a pretty bearish view from an analyst, but the oversized volume numbers that are slated to open by 2021 are sure to be diminishing for now. In the first two weeks of the new year, the daily spot volume of Bitcoin on the eight major exchanges recorded by CoinDesk (Bitfinex, Bitflyer, Bitstamp, Coinbase, Gemini, itBit, Kraken, and Poloniex) averaged $ 6.1 billion per day. For Friday, the spot volume at the time of going to press is $ 4.2 billion.
Spot volumes on the major Bitcoin exchanges in 2021 (Shuai Hao / CoinDesk Research)
"There is a clear pull between North American and Asian crypto asset traders," noted Joel Edgerton, chief operating officer of BitFlyer USA cryptocurrency exchange. "With the US heading into a three-day weekend, US trade volume will be lower, so Asia will likely set the tone."
Many investors and traders will be absent on Monday for Martin Luther King Jr. Day, including US stock markets, which along with other major indices, will end the week on Red Friday.
"The most important thing is that the macro view hasn't changed," said Bitflyer's Edgerton. “There is a growing demand for crypto assets, a reluctance to sell on the part of current owners, and limited supply. This of course leads to a long-term price increase. "
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Andrew Tu, a senior executive at quant trading firm Efficient Frontier, cited the inverse relationship between the U.S. dollar index and Bitcoin as a macro example. The index, also known as DXY, is a measure of the greenback against a basket of other fiat currencies.
The historical price of Bitcoin in 2021.
Source: CoinDesk 20
"The rise in DXY came with a fall in BTC," Tu told CoinDesk. "At a fundamental level, the economy looks weak, which is likely to result in a risk reduction in dollar terms."
The US dollar index in 2021.
When Bitcoin goes up, DXY appears to go down and vice versa, at least so far in 2021. On Friday, DXY rose 0.55% during Bitcoin's bearish last 24 hours.
Well-known DeFi tokens will do better than ether in 2021
The second largest cryptocurrency by market cap, Ether (ETH), fell on Friday, trading at $ 1,139, and fell 5.7% in a 24-hour period at 9:00 PM UTC (4:00 PM ET).
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Bitcoin is up over 20% in 2021. Ether beats this easily, however, in the green over 50% to start the year. Two well-known projects based on the Ethereum platform for decentralized financing (DeFi) do even better. The token associated with the Synthetix derivatives liquidity platform has increased more than 83% so far this year, while the Aave credit protocol token has increased more than 69% in 2021.
Aether (dark blue), Synthetic (light blue) and Aave (yellow) performance on Kraken in 2021.
Jean-Marc Bonnefous, managing partner of the investment firm Tellurian Capital, told CoinDesk DeFi tokens such as aave and synthetix that they have great upside potential in bullish markets. He recently tweeted about DeFi token's performance over the past three months. However, Bonnefous warned that these lesser-known and less fluid tokens also have a downside.
"Ether is the mothership, the main reserve layer of currency for DeFi, while the DeFi coins are more application-driven and have a potential additional monetization component and some growth potential if done well," Bonnefous said. "By nature, the top DeFi assets are likely to outperform in an upward market for crypto in general and vice versa in a bear market."
The digital assets of CoinDesk 20 are mixed, mostly on Red Friday. Notable Winners as of 9:00 PM UTC (4:00 PM ET):
- Oil was down 2.9%. Price per barrel of West Texas Intermediate Crude: $ 52.12.
- Gold was in the red at 1.1% and at $ 1,825 at press time.
- The 10-year US Treasury yield fell to 1.092 on Friday and was in the red at 3.4%.
The CoinDesk 20: The assets that matter most to the market