Bitcoin unleashed a four-day losing streak and apparently stabilized at about $ 34,000. Following the recent correction of the market, the price of the cryptocurrency is still rising by 18% over the previous year, compared to a rise of 1.2% for the Standard & Poor’s 500 index of major US equities.
“This is probably not the time to panic,” Matt Blom, head of sales and trading at cryptocurrency exchange Diginex, wrote in a daily newsletter.
In traditional markets, European equities fluctuated and US futures contracts changed little when the US House of Representatives on Wednesday prepared to vote on a second indictment of President Donald Trump. Gold strengthened 0.1% to $ 1.855 per ounce.
Market movements
As bitcoin and ether retreat from recent highs, the strong performance of other cryptocurrencies shows that traders and investors can now turn to alternative signs, often referred to as ‘altcoins’ for returns.
Bitcoin prices on January 11 were about 87% of their everyday high reached last week, and ether is about 78% from the high of a few years ago, based on data compiled by CoinDesk Research. .
But other cryptocurrencies and digital assets, such as stars (XLM) and litecoin (LTC), are far from setting new records. A takeaway could be for them to continue running, Muyao Shen, CoinDesk, reported Tuesday.
Altcoins are rising “in ways we haven’t really seen since 2017,” Andrew Tu, chief executive of Efficient Frontier, told Shen.
It is, of course, possible that some entry-level investors looking at the $ 34,000 bitcoin price – which costs a small sports utility vehicle – are unaware that the largest cryptocurrency can be bought in more or less fractions, similar to the way it possible to buy. $ 100 or $ 1,000 gold.
Such confusion has in the past led some novice investors to turn to altcoins because their prices are often relatively lower, sometimes counting in cents.
David Derhy, an analyst at trading platform eToro, wrote earlier this week that some traders may be able to move to ether, the basic cryptocurrency for the Ethereum blockchain.
“Investors in bitcoin may want to make a profit and reassign, and ether could be a target,” he wrote. A target of $ 2500 is reasonable, given the gains we have already seen and the current price momentum. ‘Such a level would represent a profit of almost 150% of the current price.
Simplex, a digital asset platform, sees increasing demand for cryptocurrencies across the board, although “retail investors are apparently looking for the next BTC,” CEO Nimrod Lehavi wrote in a Google document by a spokesperson via Zoom’s chat feature.
“We are used to BTC dominating about 90% of the total trading volume,” says Jonathan Leong, CEO of BTSE, another crypto platform. “But over the past week or so, there has been an increase in our institutional clients’ demand and interest in altcoins, while the balance at times was almost 50/50.”
According to a spokesperson, Bitpanda, an Austrian cryptocurrency platform, has fallen to between 30% and 40% of customer purchases this year, from 40% to 50% last year.
“We have a large stream of users, and they trade both bitcoin and altcoins,” spokeswoman Sara Moric said in an email.
– Muyao Shen and Bradley Keoun
Read more: Several tokens see rally amid looming ‘Alt Season’
Bitcoin Watch
The outlook for bitcoin in the short term has weakened, analysts believe, and some are now seeing a possible extension of Monday’s big price drop.
“There could be another downturn as the outflow of the Coinbase Pro currency exchange has dried up, along with a larger transfer of coins to the exchange,” David Lifchitz, chief investment officer of the quantitative trading firm ExoAlpha in Paris, told CoinDesk.
Outflow from Coinbase Pro – considered a proxy for the purchase of the cryptocurrency by large institutional investors, as the outflow is usually seen as transfers to cold storage for long-term ownership – has fallen sharply from the three-year high of 55,000 BTC observed Jan. 2.
The decline could point to a weakening in institutional demand, which played a crucial role in pushing bitcoin to a new high of more than $ 41,000 last week, from just $ 10,000 just a few months ago .
Meanwhile, the exchange rate deposit has gained momentum, a sign that some investors are looking to invest and make a profit.
The number of coins held on the exchange increased by more than 57,000 BTC on Tuesday, the largest one-day change since March 2020, according to data from blockchain analysis firm Chainalysis. Stock markets have recorded an average inflow of 103,000 BTC per day over the past seven days – higher than the 180-day average of 83,700 BTC.
Some analysts looking for clues in the price chart patterns are also calling for Monday’s drop to be extended. The Ichimoku cloud, a technical analysis tool created by Japanese journalist Goichi Hosoda in the late 1960s, contains multiple lines that help identify support and resistance levels and other essential information such as trend direction and momentum. ‘
“I still see pressure on the downside in the short term,” said Patrick Heusser, head of Swiss firm Crypto Finance AG, adding that $ 29,000 could be the level for make or break. “Things can get ugly if the support is broken,” Heusser said. A price of $ 36,000 is the price the bulls have to beat.
Chris Thomas, head of digital assets at Swissquote Bank, sees a period of price consolidation for the rest of this week, in the range of $ 33,000 – $ 36,000.
Read more: Analysts are currently gloomy over Bitcoin’s short-term price outlook
What’s hot?
The European Central Bank’s Lagarde calls bitcoin ‘speculative asset’, hoping for digital euro in no more than five years (CoinDesk)
“Can the OCC even grant a national banking charter to open source software that manages deposit taking, loans or payments, if they are not officers or directors?” writes the acting American accountant of the coin Brian Brooks, in an op-ed. “Not yet. Under current legislation, based on the assumptions of the early 20th century, charters can only be issued to people” (Financial Times)
When Goldman Sachs’ head of commodity research tries to value cryptocurrencies, he begins to imagine the sector doubling to $ 2T (CoinDesk)
Bitcoin options volume on Deribit already 25% of the 2020 total (CoinDesk)
Bitcoin whales continued to pile up during Monday’s crash (CoinDesk)
Coinbase apologizes for ‘recent customer experience issues’ in UK and EU (Coinbase)
Tron is out, Dai is back, in the latest changes for CoinDesk 20 (CoinDesk Research)
“If you take away the subsidies (pay for users), this number will collapse, all the billions we currently have,” writes the creator of YearnFinance, Andre Cronje, in Medium post (Medium)
CEX, lies and videotape: Binance accuses competitors of fighting dirty (CoinDesk)
Winklevoss twins’ Gemini cryptocurrency exchange has seen a big jump in bitcoin balances (Coin Metrics) in recent years:
Analog
The latest on economics and traditional finance
Switzerland’s UBS will charge customers negative interest rates of 0.75% on cash balances of more than 250K Swiss francs ($ 280K) (Reuters)
Former US CFTC chairman Gary Gensler said Biden would be the SEC chairman (CoinDesk).
Brian Brooks, acting US accounting officer and former chief executive of Coinbase, plans to retire in the next few days, reports Politico (CoinDesk). (SEE ALSO: Brooks version above in What’s Hot.)
Zombie businesses, or inefficient companies kept alive by cheap debt, can swell due to generous government lock-in programs, which represent a major risk to banks (WSJ).
Carmen Reinhart, chief economist at the World Bank, warns that household and business balances could be overwhelmed by pandemic-related debt, which could potentially lead to a financial crisis (Bloomberg)
Revolution working remotely to fundamentally change the way managers work (Reuters)
Traders are now watching bitcoin for stock market direction (CNBC) clues
Dallas Federal Reserve Bank Robert Kaplan hopes the economy will be ready for talks on reducing the Fed’s asset purchases by $ 120 billion a month later (Bloomberg)
ICYMI: “Central banks show no tendency to moderate their enormous stimulus,” writes Mohamed El-Erian, Allianz, in op-ed (Bloomberg opinion)
The US Federal Reserve focuses on the positive prospects for medium-term work, based on the success of a coronavirus vaccine (Reuters)
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