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Market Wrap: Bitcoin Blows Past $36.1K While Traders Clamor for Ether Options

Bitcoin hit another all-time high today while ether traders are paying royally to get in on the options action.

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Retail buying through PayPal is likely helping push bitcoin’s price higher while traders are hoping to get into an ether options market with potential volatility similar to March 2020.

  • Bitcoin (BTC) trading around $36,122 as of 21:00 UTC (4 p.m. ET). Gaining 5.7% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $33,875-$36,122 (CoinDesk 20)
  • BTC well above its 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.

Bitcoin trading on Bitstamp since Jan. 3.
Source: TradingView

The price of bitcoin hit another all-time high Wednesday, jumping to $35,735 at 04:00 UTC (11 p.m. ET Tuesday), easily surpassing Jan. 2’s previous record high of $34,366.

Read More: Bitcoin Sets New All-Time High Above $35K

And then, after hitting that price zenith, the world’s oldest cryptocurrency settled around the $35,000 level for several hours before heading upward yet again, hitting $36,122 as of press time.

“With a lot of demand from new market participants, both institutional and retail, it is reasonable to assume that we keep going up,” said Michael Gord, chief executive officer of trading firm Global Digital Assets. “A $650 billion market cap is still tiny in comparison to other global currencies or commodities that bitcoin is competing with.”

Historical bitcoin price the past week
Source: CoinDesk 20

“In addition to institutions continuing to push the market forward we are starting to see a surge of retail demand as well,” Gord added. 

Many funds, including Pantera Capital, are identifying growth in retail demand via PayPal’s brokerage Paxos, which also owns the itBit exchange and provides liquidity. Since PayPal launched cryptocurrency capabilities for its users, itBit’s BTC volume numbers have increased significantly.

ItBit spot volumes over the past year.
(Shuai Hao/CoinDesk Research)
Source: CryptoCompare

Since the Nov. 13 rollout of cryptocurrency services to all U.S. PayPal users, itBit’s average bitcoin daily volume has been $25.9 million. That’s much higher than the exchange’s comparatively paltry $5.3 million daily average over the past year, according to CoinDesk 20 data. 

Of course, bitcoin isn’t the only cryptocurrency out there, and some exhaustion is expected as traders rotate into alternative digital assets, or altcoins, in hopes of capturing big-time gains. 

“The altcoin market is becoming more appealing for traders and investors who are looking for large returns,” Jean Baptiste Pavageau, partner at quant trading firm ExoAlpha, told CoinDesk. “We expect to see bitcoin dominance starting to decrease and the altcoin market booming over the next few weeks.” 

Indeed, bitcoin’s dominance, its percentage share of the overall crypto market, has dropped 4.6% since Jan. 3. 

Bitcoin dominance in the crypto market for 2021 so far.
Source: TradingView

As traders jump into crypto assets with smaller market capitalizations, bitcoin may see a temporary cooling, according to Global Digital Asset Chief Operating Officer Zachary Friedman. “We should be seeing stronger hands [who don’t sell easily], which may shorten the drawdown. But I wouldn’t be surprised to see a retrace of 20% before moving higher,” he said.

The heat is on ether options

The second-largest cryptocurrency by market capitalization, ether (ETH), was up Wednesday, trading around $1,206 and climbing 9.2% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Ether derivatives, such as futures and options, are instruments traders are now clamoring for. On Deribit, the top venue for ether options, implied volatility, which is the forecast of an asset’s spot price movement, is 170%, according to data aggregator Genesis Volatility.

Ether options implied volatility the past year.
Source: Genesis Volatility

“These levels haven’t been seen since the March [COVID-19] crisis,” said Greg Mandini, chief executive officer for Genesis Volatility. At that time, ether options’ implied volatility surpassed 230%. The levels this week indicate traders are paying huge premiums to play in the ether options market. 

Read More: UK’s Ban on Crypto Derivatives Goes Into Effect Today

“There is an undeniable FOMO for ETH exposure,” Mandini added. “Combine the effects of staking and CME’s ETH future launch in February we can see strong incentives for institutional capital flowing into ETH.”

Other markets

Digital assets on the CoinDesk 20 are all green Wednesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Read More: Stellar’s XLM Rallies to 2-Year High on XRP Woes, OCC Ruling, Ukraine

Commodities:

  • Oil was up 1.1%. Price per barrel of West Texas Intermediate crude: $50.36.
  • Gold was in the red 1.6% and at $1,918 as of press time.

Treasurys:

  • The 10-year U.S. Treasury bond yield climbed Wednesday jumping to 1.034 and in the green 7.7%.

The CoinDesk 20: The Assets That Matter Most to the Market

Disclosure

Source: https://www.coindesk.com/market-wrap-bitcoin-past-36k-traders-want-ether-options

Blockchain

The First Decentralized Crypto Volatility Index (CVI) To Be Launched By COTI

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Cryptocurrency traders that want to benefit from the infamous market volatility would be able to do so by taking advantage of COTI’s recently launched Crypto Volatility Index (CVI). Users will be able to place positions in anticipation of significant fluctuations in either direction.

The First Decentralized Crypto Volatility Index

COTI is a blockchain project that describes itself as a “fully encompassing finance” on the distributed ledger technology. It’s designed to meet and address challenges of traditional finance, such as fees, latency, global inclusion, and risk.

The project referred to traditional finance as well with its latest product – the Crypto Volatility Index. COTI said in a press release shared with CryptoPotato that CVI is inspired by the stock market’s Volatility Index.

CVI is already live on the mainnet, and users who want to participate can deposit Tether (USDT) to open positions or provide liquidity.

“The index enables traders to profit from market volatility by opening positions in anticipation of major movements in either direction. Users who expect volatility to increase can open a CVI position. If correct, they can take profit by selling their positions once the index has risen.”

The index will work in the opposite direction as well. If traders believe that the volatility will remain low, they can provide liquidity to the platform and profit by collecting fees paid by traders who have opened CVI positions.

The announcement further described the index as a “full-scale decentralized ecosystem that brings the popular ‘market fear index’ to the crypto market.”

Updates, Staking, And Liquidity Providing

COTI noted that users will also be able to connect the CVI index with their MetaMask or Trust Wallet accounts to manage their positions, provide liquidity, and deposit/withdraw funds.

Those who decide to provide liquidity need to deposit USDT for a minimum of 72 hours before receiving a share of the premiums collected by the pool. On the other hand, traders who have opened a position must maintain it for at least six hours before selling or closing it.

The index will work with its own native governance token called GOVI. The platform will enable users to stake the coin to earn fees and participate in voting. Token holders will also have a saying in determining which tradable assets are available on CVI, the allowed leverage, deposit amounts, and platform fees.

Future updates to the index include adding ETH and COTI as deposit tokens, more derivatives markets data sources, an advanced traders dashboard, margin trading, and an enhanced voting platform.

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Source: https://cryptopotato.com/the-first-decentralized-crypto-volatility-index-cvi-to-be-launched-by-coti/

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Blockchain

Long Bitcoin Unseats Tech Stocks as the Most Crowded Trade in January, BofA Reports

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Trading above $35,000, Bitcoin continues to pass milestone after milestone as reports show that the cryptocurrency received the most capital inflow this month compared to tech stocks and traditional investments. 

Long Bitcoin Wins Most Crowded Trade

A recent survey conducted by the Bank of America on fund managers with over $500 billion in AUM reveals that investors are bullish on Bitcoin’s price in the long term. 

The study shows that “long bitcoin” dethroned “long tech” as the most crowded trade in January 2021. 

Reuters reported Tuesday that this is the first time a long position on technology companies is losing the top spot since October. This is also the first time “long bitcoin” has ever ranked first in the financial markets. 

The milestone is coming just three months after less than 5% of the participants in November’s survey voted for “long bitcoin” as a preferred trade, with more than 65% of fund managers choosing “long tech.” 

A previous survey conducted by BofA showed that “long bitcoin” climbed up to the top three preferred trades in December as fund managers named it as the “third-most crowded” trade.

Shorting USD

While investors are bullish on Bitcoin, traders are still losing faith in the US dollar as they continue to bet against it. The survey places “short USD” as the third most crowded trade for the month, just one spot below its previous position. It was the second-most crowded trade in December. 

As reported earlier, one reason for the criticism against the US dollar is the FED’s money printing spree during the peak of the COVID-19 pandemic last year, which allegedly saw the creation of almost 20% of all existing USD. 

Investors argue that the FED’s action is a recipe for inflation, with many economists predicting that the USD value would fall. To protect themselves against the supposed impending dollar doom, investors and institutions seeking to preserve their wealth chose Bitcoin, which has turned out to be a win for them so far. 

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Source: https://cryptopotato.com/long-bitcoin-unseats-tech-stocks-as-the-most-crowded-trade-in-january-bofa-reports/

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New timeline charts Bitcoin’s price alongside historical events of the past decade

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Bitcoin (BTC) has travelled an eventful path since its creation in 2009. TradingView.com recently unveiled a BTC chart showing major events in the digital asset’s history, alongside the cryptocurrency’s ever-changing price.

Released on Tuesday, the chart points out potentially significant events on Bitcoin’s price path, showing a “consolidated history of Bitcoin overlaid on the de facto crypto charts (by TradingView),” the platform’s general manager, Pierce Crosby, told Cointelegraph.

TradingView’s team intends to update the chart every 14 days — though if major news breaks, the team says they will adjust the metrics sooner. Clicking various bubbles on the chart produces an explanation of each event. The site also lists events in blog-like form below the chart.

Crosby said:

“TradingView Timelines have been a unique undertaking by our core visualization team and show us the importance of putting ‘news in context’ (the corresponding chart). We expect this logic will become much more mainstream in the coming years to prove the relevance of a given news story. This is just the first step.”

Worth less than $1 in its earliest days, the digital asset rocketed up past $40,000 in 2021. Many major events have occurred along that price path, such as the Mt. Gox ordeal.

“Our initial observations show the immediate impact of historical events on the price of the asset,” Crosby said. The BTC timeline shows a barrage of events, although the most recent headlines focus on the numerous price hurdles broken by the asset.

“Looking at some of the early historical events, they are dwarfed by the price action in 2015 – 2017 the first period of time when current events captured the mainstream imagination of investors,” Crosby observed from the chart.

Such a timeline adds a tool for discussions on Bitcoin’s price as it pertains to events and possibly correlated reactions. “Looking solely at BTC price movements in the market gives an incomplete view of why its price fluctuates the way it does, in a seemingly volatile manner,” Crosby said, adding:

“Timelines is the first comprehensive source to share price movements along with corresponding real-life events, so investors can understand why there are certain spikes or dips, helping inform them for the future and giving them a deeper understanding of the asset they’re trading.”

Source: https://cointelegraph.com/news/new-timeline-charts-bitcoin-s-price-alongside-historical-events-of-the-past-decade

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