Trading activity in the Bitcoin market slowed on Tuesday as the price of ether broke new ground.
- Bitcoin (BTC) starts trading at $ 36,483 as of 9:00 PM UTC (4:00 PM ET). Climbing 0.85% in the last 24 hours.
- Bitcoin’s 24-hour range: $ 36,029 to $ 37,876 (CoinDesk 20)
- BTC below the 10-hour average but above the 50-hour moving average on the hourly chart, a sideways signal for market technicians.
Bitcoin price stayed in a fairly tight range on Tuesday, spending most of the trading hours in the US between $ 36,200 and $ 37,200. At around 3:00 PM UTC (11:00 AM CET), the price rose to $ 37,876 before falling and was $ 36,483 at press time.
“Interesting yesterday that Bitcoin kept its price in a quiet US market with the [Martin Luther King Day] Vacation, ”said Chris Thomas, Head of Digital Assets at Swissquote Bank. “This also suggests that US customers, both residential and institutional, are very important.”
Continue reading: Bitcoin’s Price Must Exceed $ 40,000 to Stop Exodus From Traders: JPMorgan
“We had two failed attempts to break and stay above $ 40,000, but we saw those at $ 20,000 and $ 30,000 too,” said Thomas. “I guess we’ll be making $ 40,000 in the next day or two.”
In the meantime, traders seem to be at higher risk as prices are less volatile than before.
“It looks like Bitcoin has been squeezed between a tightening range of $ 34,000 and $ 38,000 over the past week. However, the market will be more leveraged over the long term,” said Cindy Leow, portfolio manager at multi-strategy trading firm 256 Capital Partners.
Leverage remains high at key venues, according to data aggregator Skew. Kraken in particular has shown high levels of volatility in funding rates, but as of Tuesday is offering 0.0471% the best for crypto holders to provide liquidity for long leverage.
“We see this as declining in the short term, which indicates that too many market participants are eager to see an uptrend,” added Leow. “On top of that, sellers appear to be exhausted and the dollar market is very tight with frothy USD / stablecoin lending rates.”
According to DeFi Pulse, the decentralized finance (DeFi) credit market has exceeded $ 12 billion, with stablecoin maker Dai (DAI) accounting for over 39% of that percentage. Dai currently accounts for $ 4.7 billion in the DeFi credit market, up over 11% on Tuesday.
Part of this DeFi spike is also due to a rising price of ether, which broke out to new highs on Tuesday while Bitcoin remained relatively calm. “Ether looks really strong and I think we’re now entering a race between $ 2,000 ETH and $ 50,000 BTC,” said Swissquote’s Thomas.
“We see that ETH is likely to face resistance at its all-time high, similar to the way BTC was originally rejected at its previous high of $ 19,000 in November 2020 before resuming an uptrend,” said Leow of 256 Capital.
Ether hits a record high
Ether (ETH), the second largest cryptocurrency by market capitalization, rose Tuesday, trading at $ 1,384, and rose 12.7% in 24 hours from 9:00 PM UTC (4:00 PM ET).
The spot price for ether hit an all-time high on Tuesday, rising to $ 1,439 and just supplanting its previous high of $ 1,432.88 on January 13, 2018.
Continue reading: Ethereum’s ether cryptocurrency sets a new high near $ 1,440
George Clayton, managing partner of the crypto fund Cryptanalysis Capital, questions the fundamentals of the rise of ether, while Bitcoin doesn’t seem to correlate with the rise of ETH. “Interesting price promotion,” Clayton told CoinDesk.
He noted that on these price runs, the average network charges usually go up, which actually hurts the usability. Using Ethereum’s DeFi projects becomes more expensive during price runs, as it requires processing fees or “gas” in ether increments to use.
“With fees at such astronomical levels, Ethereum becomes sclerotic and exclusive,” Clayton added. “I have to hope that ETH 1.5 and rollups will take some pressure off.”
Digital assets on CoinDesk 20 are mostly green on Tuesday. Notable Winners as of 9:00 PM UTC (4:00 PM ET):
- Oil rose 1.8%. Price per barrel of West Texas Intermediate Crude Oil: $ 53.00.
- Gold was flat, in the green at 0.10% and at $ 1,838 at press time.
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- The 10-year US Treasury yield rose to 1.089 on Tuesday and is in the green by 0.16%.