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Market Wrap: Bitcoin Makes Headway to $10.3K; Ether Volatility Highest Since May

Bitcoin is making some modest price gains while the ether roller coaster gathers more steam.

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Bitcoin is eking out gains Wednesday while ether’s volatility is up on DeFi drama.

  • Bitcoin (BTC) trading around $10,299 as of 20:00 UTC (4 p.m. ET). Gaining 2.7% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $9,818- $10,349
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

btcsep9
Bitcoin trading on Coinbase since Sept. 7.

Bitcoin is slowly making gains Wednesday, reaching as high as $10,349 as of press time. 

Read More: Bitcoin’s Correlation With Gold Hits Record High

“After the Sept. 2-3 drop, bitcoin has been stuck in a narrow range of $10,100 to $10,500, looking for direction,” said David Lifchitz, chief investment officer for crypto quantitative firm ExoAlpha. “Each drop below $10,000 has been furiously bought, keeping BTC above that,” he added.  

Over the past week, traders have come in and scooped up sub-$10,000 bitcoin, with $9,800 being a level tested but retraced. 

btcweeksep9
Bitcoin trading the past week.
Source: TradingView

While bitcoin is trending upward, the cryptocurrency needs volume to boost it further, Lifchitz added. “This is typical of a wounded asset recovering,” Lifchitz added.” Contrary to traditional assets, there’s no federal printing press to artificially prop up digital assets, only good old demand,” he said.

So far Wednesday, demand as measured in volume is relatively flat – a paltry $245 million combined on major spot exchanges according to Skew. This is much lower than a week ago, when spot volumes hit a one-month high of $1 billion.

skew_btc_spot__aggregated_daily_volumes-34
Bitcoin volumes on major spot exchanges the past month.
Source: Skew

John Willock, CEO of digital-asset liquidity firm Tritium, says the ebb and flow in the bitcoin market is simply natural. “This short-term dip down to current levels was a reasonable pullback,” he said.  “A steady move upwards in BTC is fully in line with my expectations for the medium-term and through the end of the year.” 

Read More: ‘High’ Severity Bug in Bitcoin Software Revealed 2 Years After Fix

According to ExoAlpha’s Lifchitz, “Until bitcoin reaches above $10,600, there’s no hope for a retry toward $12,000 anytime soon.” 

Read More: Huobi Launches Crypto Saving Products to Compete With DeFi

Ether volatility up

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Wednesday, trading around $357 and climbing 6% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Firms Warn of Potential DeFi Scam After $2.5M in ‘Locked’ Cryptos Moved

Ether’s one-month realized volatility, a measure of the standard deviation of returns based on historical data, is at 106% on an annualized basis, its highest point since way back on May 6.

skew_ethusd_realized_volatility-3
Realized volatility for ETH/USD the past six months.
Source: Skew

It is clear that ether is more volatile than bitcoin, which, at 57% one-month realized annualized volatility Wednesday, is at a level consistent with its August volatility numbers. 

skew_btcusd_realized_volatility-2
Realized volatility for BTC/USD the past six months.
Source: Skew

Vishal Shah, an options trader and founder of derivatives exchange Alpha5, said uncertainty surrounding decentralized finance, or DeFi, is helping drive volatility in ether, and not in the derivatives that are usually the culprit in crypto. 

“I don’t think much of this volatility is driven by ETH optionality, as the market is relatively small,” Shah said. “Rather, it seems to be a byproduct of pent-up disbelief in gas prices and the large rotations in total value locked in DeFI,” he added. 

Read More: NY AG Asks Court for New Order to Make Bitfinex Turn Over Documents

Other markets

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

Read More: Arca to Gnosis: Show Us a Turnaround Plan or Give Investors’ Money Back

Read More: Court Denies Bitmain $30M in Damages From Co-Founders of Rival Poolin

Commodities:

  • Oil is up 3.3%. Price per barrel of West Texas Intermediate crude: $37.96.
  • Gold was in the red 0.90% and at $1,948 as of press time.

Read More: DCG Enters Retail Crypto Market With Acquisition of Luno Wallet

Treasurys:

  • U.S. Treasury bond yields all climbed Wednesday. Yields, which move in the opposite direction as price, were up most on the two-year, coming in at 4.2%.

Read More: Mastercard Platform Enables Central Banks to Test Digital Currencies

https://www.coindesk.com/coindesk20
The CoinDesk 20: The Assets That Matter Most to the Market
Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/market-wrap-bitcoin-ether-volatility

Blockchain

Opimas estimates that over US$190 billion worth of Bitcoin is currently at risk due to subpar safekeeping

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May 2021. Safekeeping of cryptocurrencies presents a challenge for institutions holding cryptocurrencies on their clients’ behalf. Cryptocurrency transactions are irreversible and anyone with full access to a wallet’s private key controls the cryptocurrencies that reside within it. Frighteningly, a number of institutional participants and even some large cryptocurrency exchanges rely on subpar custody approaches, leading Opimas to estimate that over US$190 billion worth of Bitcoin is currently at risk due to subpar safekeeping.

Luckily, a number of companies have emerged to address this problem. A new research report from Opimas—Crypto Custody: No More Excuses, authored by analysts Suzannah Balluffi and Anne-Laure Foubert—looks at the landscape of cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians as well as the size of the market for cryptocurrency custody and brokerage services.

Some key findings in the report include:

Many of even the largest holders of Bitcoin and other digital assets continue to rely on storage devices meant for individual investors. Although some of these self-custody devices and wallets are secure and reputable, the operational risk posed by this approach is significant for institutional investors. Furthermore, a chunk of institutionals’ cryptocurrency holdings sit in hot wallets on exchanges. In total, about 22% of institutional cryptocurrency holdings are safeguarded in these relatively risky manners (Figure 1).

Figure 1. CUSTODY METHODS UTILIZED BY INSTITUTIONAL INVESTORS 

 

Source: Opimas analysis.

There are no more excuses for lackadaisical safekeeping – institutions can now choose from several reputable cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians. Yet no custody solution is equal – there is still no best practice when it comes to security and governance relating to private keys. For example, some providers may rely on time-tested Hardware Security Modules (HSMs), while others use a newer technology known as Multi-Party Computation (MPC) – see Figure 2.

Figure 2. A COMPARISON OF HSM AND MPC TECHNOLOGY PROVIDERS

Source: Ledger, Fireblocks, Opimas analysis.

Some cryptocurrency custodians have followed in the footsteps of traditional capital markets by adding prime brokerage services to their offerings, including trading and settlement, lending, margin finance, staking, reporting, and capital introduction services. Opimas estimates that the current annual revenues generated by the institutional crypto brokerage and custody market are roughly US$2 billion and will grow to nearly US$8 billion by 2026 – a sizeable portion of this coming from brokerage services (Figure 3).

FIGURE 3. THE MARKET FOR CRYPTO CUSTODY & PRIME BROKERAGE SERVICES IS GROWING 

Source:  Opimas analysis. 

  • Regulations surrounding institutions’ ability to store cryptocurrency have become clearer (and in some cases more favorable) in numerous jurisdictions. Notably, the Office of the Comptroller of the Currency (OCC) ruling in the US has allowed banks to store cryptocurrencies for their customers. This regulatory clarity has led a number of financial institutions around the world to provide trading and custody for digital assets. With the advances in brokerage and custody solutions, Opimas expects institutional cryptocurrency holdings to grow from 20% of the cryptocurrency market cap to over 50% by 2026 (Figure 4).

FIGURE 4. INstitutional cryptocurrency holdings over time 

Source:  Opimas analysis.

Source: PlatoData Intelligence

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Blockchain

Bitcoin (BTC) Price Prediction: BTC/USD Faces Rejection Thrice at the $60,000 Resistance Zone, Resumes Downward Correction

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Bitcoin (BTC) Price Prediction – May 9, 2021
Bitcoin bulls have broken above the $58,000 resistance but the bullish momentum could not be sustained. Today, BTC/USD traded as price reached the high of $59,450. The king coin is likely to retrace to $57,000 low if the bulls fail to break the $60,000 psychological price level.

Resistance Levels: $65,000, $70,000, $75,000
Support Levels: $50,000, $45,000, $40,000

BTC/USD – Daily Chart

Bitcoin price was rejected thrice at the $60,000 resistance level. Buyers made frantic efforts to sustain the bullish momentum above the recent high but were repelled by overwhelming selling pressure. Consequently, Bitcoin has resumed a downward move as a result of a strong rejection at the resistance of $59,200. The current retracement will extend to the low of $57,000. Nevertheless, if price breaks below the $57,000 support, the market will continue the downward move. That is, the selling pressure will extend to the low of $53,000. On the upside, if price retraces and finds support above $58,000, the upside momentum will resume.

Bank of England Governor Warns on Crypto Investment
Andrew Bailey is the governor of the Bank of England who has warned crypto investors of the inherent dangers of cryptocurrency investment. The governor argued that cryptocurrencies lacked intrinsic value. According to him, “I would only emphasize what I’ve said quite a few times in recent years, [and] I’m afraid they have no intrinsic value. I’m sorry; I’m going to say this very bluntly again: Buy them only if you’re prepared to lose all your money.” Bailey’s comments are coming at a time when crypto markets are characterized by a huge spike in crypto prices. Major altcoins such as Polkadot, Chainlink, and XRP have also seen vertical price actions.

BTC/USD – 4 Hour Chart

Bitcoin risks another downward correction as the king coin faces stiff rejection at the $59,450 resistance. The Fibonacci tool has already indicated a marginal upward move of Bitcoin and a possible reversal. On May 1 uptrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that Bitcoin will rise to level 1. 272 Fibonacci extension or the high of $59,819.90. From the price action, BTC price has reached a high of $59,450 and has commenced a downward move.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://insidebitcoins.com/news/bitcoin-btc-price-prediction-btc-usd-faces-rejection-thrice-at-the-60000-resistance-zone-resumes-downward-correction

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Dogecoin dumps following mention from Elon Musk on Saturday Night Live

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Meme cryptocurrency Dogecoin finally got its long-awaited shoutout on Saturday Night Live — but despite hodler hopes, the immediate result has been a violent dump.

First teased by entrepreneur and DOGE cheerleader Elon Musk in late April, the Tesla CEO finally mentioned the digital asset on live television tonight in his opening monologue of the sketch comedy show. The reference was a throwaway line from Musk’s mother, who joined him onstage and asked if her Mother’s Day gift would be Dogecoin; Musk replied that it would be. 

In the minutes afterwards, $DOGE dumped upwards of 25%, falling as low as $.50 from $.66 highs at the start of the show. It has since partially recovered, trading at $.52 at the time of publication.

An hour before the episode began, the price of DOGE sat at $.66, down from an all-time high of $.72. A pair of bearish headwinds may have shared responsibility for the pullback: Musk himself seemed to try and get ahead of the hype, urging followers in a Tweet to “invest with caution,” and a host of new data indicates that many investors may be rolling their DOGE profits into other, largecap digital assets

Additionally, Barry Silbert — the founder and CEO of Digital Currency Group, the parent company of crypto investment vehicle company Grayscale — announced a public short on DOGE via the FTX exchange. In a series of follow-up Tweets, he revealed that the position was $1 million in size, and that any proceeds or remaining funds after closing the short would be donated to charity. 

(It’s unclear if Silbert was is using “we” in reference to Digital Currency Group, one of its portfolio companies, or is simply and bizarrely using a plural pronoun in reference to himself). 

Many DOGE investors were nonetheless holding out hope for a high-profile shoutout on what looked to be a major pop culture event. NBC, the studio behind SNL, chose for the first time ever to live-stream the episode on Youtube, per the Wall Street Journal.

Even a mention could have significant impact on the price of DOGE as well: the meme currency has proven to be susceptible to price movements based on positive social media volume, and multiple studies have shown that Tweets from Musk often lead to price appreciation. A mention on an even bigger platform was thought to potentially lead to even greater gains. 

Leading into the premier of the episode, Alameda Research trader Sam Trabucco (who said in a previous Tweet that he was “studying the typical SNL episode structure to try and understand when a DOGE mention would be the most natural”) speculated that if a joke or mention didn’t come in Musk’s opening monologue, it would be “all over.”

Despite arriving during the monologue, traders nonetheless responded negatively. It remains to be seen if a DOGE-centric skit later in the show can perhaps turn the speculative asset’s fortunes around.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/dogecoin-dumps-following-mention-from-elon-musk-on-saturday-night-live

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