Trading action in the bitcoin market slowed Tuesday while etherâ€™s price broke new ground.
- Bitcoin (BTC) trading around $36,483 as of 21:00 UTC (4 p.m. ET). Climbing 0.85% over the previous 24 hours.
- Bitcoinâ€™s 24-hour range: $36,029-$37,876 (CoinDesk 20)
- BTC below the 10-hour but above the 50-hour moving averages on the hourly chart, a sideways signal for market technicians.
The price of bitcoin stayed in a fairly tight range Tuesday, spending most of U.S. trading hours between $36,200 and $37,200. At around 15:00 UTC (11 a.m. ET), the price spiked to as high as $37,876 before dropping and was at $36,483 as of press time.Â
â€œInteresting yesterday that bitcoin held its price in a quiet U.S. market with the [Martin Luther King Day] holiday,â€� noted Chris Thomas, head of digital assets for Swissquote Bank. â€œThis also suggests that U.S. clients, both retail and institutional, are quite important.â€�
â€œWe had two failed attempts to break and stay above $40,000, but we saw that at $20,000 and $30,000 as well,â€� said Thomas. â€œI suspect weâ€™ll get through $40,000 in the next day or two.â€�
In the meantime, as prices stay less volatile than before, traders appear to be adding on more risk.Â
â€œLooks like while bitcoin is being squeezed between a tightening $34,000-$38,000 range in the past week, the market is going more leveraged long,â€� noted Cindy Leow, portfolio manager for multi-strategy trading firm 256 Capital partners.Â
According to data aggregator Skew, leveraged funding on major venues remains high. Kraken in particular has shown a high degree of volatility in funding rates, but as of Tuesday is offering the most for crypto holders to provide liquidity to leverage up long, at 0.0471%.
â€œWe see this as short-term bearish, indicating too many market participants are eager for an upside breakout,â€� Leow added. â€œAdding on to that, sellers seem exhausted, and the market is very short on dollars with frothy USD/stablecoin lending rates.â€�Â
According to DeFi Pulse, lending on the decentralized finance, or DeFi, market has passed $12 billion, with the stablecoin Maker dai (DAI) taking up over 39% of that share. Dai currently makes up $4.7 billion of the DeFi lending market, up over 11% Tuesday.Â
Some of this DeFi spike is also coming from a rising price in ether, which saw a breakout Tuesday to fresh highs whereas bitcoin has stayed relatively quiet. â€œEther is looking really strong and I think weâ€™re now entering a race between a $2,000 ETH and $50,000 BTC,â€� said Swissquoteâ€™s Thomas.
â€œWe see ETH likely facing some resistance at its all-time-high, similar to how BTC was initially rejected in November 2020 at its previous $19,000 high before resuming an uptrend,â€� said 256 Capitalâ€™s Leow.
Ether hits a record high
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Tuesday, trading around $1,384 and climbing 12.7% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
The spot price of ether hit an all-time high Tuesday, going up to $1,439 and just edging out its previous high from $1,432.88 set Jan. 13, 2018.
George Clayton, managing partner of crypto fund Cryptanalysis Capital, questions the fundamentals behind etherâ€™s rise while bitcoin seems uncorrelated with ETHâ€™s rise. â€œInteresting price action,â€� Clayton told CoinDesk.Â
He noted that average fees on the network usually spike with these price runs, which actually hurts usability. Ethereumâ€™s DeFi projects get more expensive to use during price runs because processing fees, or â€œgasâ€� in increments of ether, are required for its use.
â€œWith fees at such astronomical levels, Ethereum is becoming sclerotic and exclusive,â€� Clayton added. â€œHave to hope that ETH 1.5 and rollups relieve some pressure.â€�
Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
- Oil was up 1.8%. Price per barrel of West Texas Intermediate crude: $53.00.
- Gold was flat, in the green 0.10% and at $1,838 as of press time.
- The 10-year U.S. Treasury bond yield climbed Tuesday to 1.089 and in the green 0.16%.
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