Market Wrap: Bitcoin pulls again from $ 13,00zero as Ether falls on DeFi cooling
Bitcoin has retreated from 2020 highs as the airwaves slide as DeFi cools.
- Bitcoin (BTC) starts trading at $ 12,919.97 as of 8:00 PM UTC (4:00 PM ET). 1.36% decrease in the last 24 hours.
- Bitcoin's 24-hour range: $ 12,731.06 – $ 13,192.25.
Bitcoin's price saw a slight decline on Friday after hitting new 2020 highs above $ 13,000 last week. However, analysts and traders said they were not at all surprised by the recent moves.
Continue reading: Active Bitcoin addresses highest since the record price of $ 20,000 in 2017
An immediate sell-off by longtime Bitcoin holders as prices spun around $ 13,000 could be the reason Bitcoin struggled to sustain its rally, according to on-chain data website Santiment.
Bitcoin's dormant circulation, which tracks Bitcoin's activity that had previously not been moved for at least a year, saw the largest increase since February 7, 2020, according to Santiments data.
Movement of dormant Bitcoin for at least 365 days.
"Renewed activity by long-term BTC investors often means increased price volatility," Dino Ibisbegovic, market analyst at Santiment, told CoinDesk. "Similar peaks – especially during price rallies – have typically included periods of price consolidation or short-term corrections in the past."
Darius Sit, founder of Singapore-based QCP Capital, told CoinDesk the market could expect further decline over the weekend, noting that the TD Sequential indicator could signal a reversal in Bitcoin prices.
On the flip side, the growing interest in open options could support a Bitcoin floor price above $ 12,500, said Guy Hirsch, U.S. executive director for eToro, in an email to CoinDesk.
"This price point has long been viewed as the glass ceiling BTC had to break in order to make significant upward moves," said Hirsch. "Given the positive sentiment on PayPal news yesterday, I wouldn't be surprised if Bitcoin was challenged and dropped over $ 13,000 in the near future."
Total open BTC options since September 23rd.
In addition, significant institutional interest in cryptocurrency has continued to grow. This shows the fact that tCME, an exchange run primarily by institutional holdings, outperformed both Binance and BitMEX as the second largest Bitcoin futures platform by number of open contracts this week.
Continue reading: The rise in Bitcoin futures rankings by CME signals growing institutional interest
"The PayPal news is the bright and shiny thing this week, but it's only the tip of the iceberg," Matt Hougan, global research director at Bitwise Asset Management, told CoinDesk. "Behind the scenes, the attitude of institutional investors, broker-dealers and financial advisors towards crypto has changed fundamentally in the past few months."
"We are in a legitimate bull market right now," he added.
The ether slips off as DeFi cools down
The second largest cryptocurrency by market capitalization, Ether (ETH), fell $ 409.05 on Friday and fell 1.78% in 24 hours from 8:00 PM UTC (4:00 PM ET).
With Bitcoin prices, the token began to reverse some of the gains made in mid-Thursday as ETH / BTC gained 4% in two hours, was 2% below the daily high, and traded at 0.0317 BTC per ether and has been on the downward trend since Week continued open to Bitcoin-based trading pair.
The decline in Ether versus Bitcoin could indicate a continued cooling of alternative cryptocurrencies (Altcoins). Skew, a leading market data provider, noticed the downward trend in Ether on Twitter and asked rhetorically: "Altseason on pause?"
Decentralized finance (DeFi) spiked altcoin returns over the summer, and declining trading volumes on decentralized exchanges (DEX) confirm a potentially significant decline in speculative interest in altcoins, especially DeFi-focused assets. The 30-day trailing volume for leading DEXs is down 41%, according to Dune Analytics.
Digital assets on CoinDesk 20 are all red fridays. The bigger losers from 8:00 p.m. UTC (4:00 p.m. ET):
- Zcash (ZEC) – 6.16%
- Dash (DASH) – 5.46%
- XRP (XRP) – 4.09%
Continue reading: Five On-Chain Indicators Investors Should Follow: Chain Analysis
- Oil was down 2.13%. Price per barrel of West Texas Intermediate Crude: $ 39,482.
- Gold was in the red at 0.03% and at press time at $ 1902.97.
- US Treasury bond yields fell on Friday. Ten-year yields, which are moving in the opposite direction as price, fell to 0.85.