Market wrap: Bitcoin slips to $ 35,000, ETH to $ 2.4,000 on Biden, environmental decline
Bearish news is sending the crypto market plunging, and there is uncertainty as to when prices might pick up.
- Bitcoin (BTC) trading around $ 35,889 at 9:00 p.m. UTC (4:00 p.m. ET). Decreased 7.6% in the last 24 hours.
- 24 Hour Bitcoin Range: $ 35,453 – $ 39,053 (CoinDesk 20)
- Ether (ETH) is trading around $ 2,506 at 9:00 p.m. UTC (4:00 p.m. ET). In the red 9.3% over the last 24 hours.
- 24 Hour Ether Range: $ 2,443 to $ 2,784 (CoinDesk 20)
Bitcoin casts doubt on
Bitcoin, the world’s largest cryptocurrency by market cap, was down 7.6% on Friday at the time of publication. BTC was below the 10-hour and 50-hour moving average, a bearish signal for market technicians.
The price of BTC fell from $ 39,053 at 10:30 p.m. UTC (6:30 p.m. ET) on Thursday to as low as $ 35,453 at 12 p.m. UTC (8 a.m. ET) on Friday, a slippage of 9.2% based on data from CoinDesk 20.
The fundamental downturn in the crypto market, including the uncertainty over bitcoin as an inflation hedge after the administration of US President Joe Biden released a $ 6 trillion budget plan along with concerns Persistence on bitcoin mining causing environmental damage likely led to the sale on Friday.
“This could be a tough weekend for crypto investors,” said David Russell, vice president of market intelligence at brokerage TradeStation Group. “The mid-May liquidation left technical scars that may take time to heal. Bitcoin costs less than $ 40,000 and hangs out in space.
On May 23, bitcoin fell to its lowest level in a month at $ 33,140, according to data from CoinDesk 20.
Read more: Bitcoin in corrective phase below $ 40,000; More decline expected
BTC calls add up to $ 100,000
In the bitcoin derivatives market, the first positioning on the flagship options site Deribit is at a strike price of $ 100,000 which seems quite far away. According to Deribit data, more than 8,000 calls with a notional value of $ 305 million are in six figures.
“You can see there’s even a $ 400,000 strike, which is ridiculous,” said Nathan Cox, chief investment officer of crypto fund Two Prime.
Diving deeper, the Genesis Volatility data aggregator provides implied volatility metrics based on Deribit expiration data. At the expiration of June 11, for example, the bias is bearish, seen by a large amount of implied volatility oriented towards the strike price of $ 20,000.
However, when looking deep into the future, implied volatility biases mega-bullish to a strike of $ 400,000 for the March 23, 2022 expiration.
It’s a short-term bearish outlook but a long-term hyper bullish mode for options traders, according to Cox. And he thinks there might be more downsides to come before a reversal.
“So it’s like, yes, we all believe in the macro case of bitcoin,” Cox told CoinDesk. “But the question is, how are you trading it right now?” And the answer might be a little more nuanced than most think, which is to tie up because we’re not done yet.
Ether volumes above bitcoin for the third day in a row
The second largest cryptocurrency by market cap, Ether, was trading around $ 2,506 at 9:00 p.m. UTC (4:00 p.m. ET), sliding 9.3% in the previous 24 hours. The asset is below the 10 hour moving average but above 50 hours a side signal for market technicians.
Ether went from $ 2,784 at 10:00 p.m. UTC (6:00 p.m. ET) Thursday to $ 2,443 at 12:00 p.m. UTC (8:00 a.m. ET) Friday, an 8.2% dump based on CoinDesk 20 data. increased and decreased, but has leveled off higher, $ 2506 at time of publication.
Spot ether volumes were higher than bitcoin for the third day in a row on Thursday, based on the latest data available from CoinDesk Research. BTC’s $ 40 million tally on Thursday was 8% lower than Ether’s $ 44 million trading volume, a sign that traders continue to find highly liquid crypto opportunities outside of bitcoin.
While this development may affect some long-term bitcoin holders, Nick Mancini, research analyst for signals firm Trade the Chain, pointed out that BTC’s dominance, or its part of the overall cryptocurrency ecosystem, is stable – it’s actually up 0.30% because of press time on Friday.
“If bitcoin’s dominance continues to increase, we expect BTC to lead the way for ETH and other large caps,” Mancini said. “And we expect ETH and BTC sentiment and price action to remain correlated throughout the weekend.”
A bitcoin use case: Ethereum
More than 230,000 BTC at the time of publication are “packed” on Ethereum, a record. The packaged bitcoin is kept in a custodial wallet, and tokens are created on the Ethereum network to represent this value and deployed in various decentralized financial applications, or DeFi, such as lending, trading, and derivatives.
With over 184,000 bitcoins, the most popular encapsulated project is wBTC. It is a joint effort of BitGo, the Kyber network and the Republic protocol, according to the white paper.
Brian Mosoff, CEO of Ether Capital, said that packaged bitcoin is breaking records due to BTC’s ongoing digital gold and treasury stories, and that this particular technology may be of interest to incumbent financial operators over time.
“These are brand new systems and software,” Mosoff said. “Watching a global community approach these issues in a decentralized fashion, making tools more robust, will lead to prime time when mainstream finance is ready to plug in its infrastructure and connect the two worlds.
Read more: Uniswap holders vote for deployment on Ethereum Scaler Arbitrum
Digital assets on CoinDesk 20 are all lower on Friday. Notable losers at 9:00 p.m. UTC (4:00 p.m. ET):
- Gold was up 0.37% and at $ 1,903 at the time of publication.
Read more: Swedish central bank tests digital currency with Handelsbanken
- The yield on 10-year US Treasury bonds fell to 1.591 on Friday and was down 1%.