Market Cover: Bitcoin Choppy About $ 56K, Early Withdrawal Appears Cooling

Bitcoin suffered its biggest one-day price cut in more than two weeks on Monday, following the emergence of a retail-driven rally over the weekend that analysts said was notable for the lack of institutional investor participation.

With the press, the price of bitcoin changed about $ 56,671.15 after tumbling to $ 54,790.33 during Asian trading hours earlier Monday.

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“This sale took place directly at the start of trading hours in Asian capital markets,” said John Willock, CEO of the digital asset exchange Blocktane. “It is therefore likely that traders there repositioned themselves for the beginning of the week, after the start.”

According to data from crypto-derived website Skew, bitcoin futures on major retail platforms reached new highs this past weekend. However, on the institution-driven CME’s bitcoin futures contract, open interest rates were lower compared to the levels at the end of February, when bitcoin’s price pierced $ 58,000 for the first time.

“The fresh everyday high of more than $ 60,000 on Saturday, coupled with the closing of traditional markets that bitcoin has been chasing recently, has meant a hopeful chase by retail participants,” Singapore-based quantum firm QCP Capital said in its weekly market update in March writing. 15. Funding rates on permanent futures contracts for bitcoin – the fees traders pay for the leverage within the trading instruments – have risen to 200% year-on-year, according to QCP as an ‘unsustainable’ level.

The lack of support from institutional investors in the recent rally is also evident from the so-called Coinbase premium. The indicator, followed by South Korean blockchain data analysis firm CryptoQuant, measures the spread between Coinbase’s BTC / USD pair and Binance’s BTC / USDT pair. Over the weekend, it turned negative, implying a weak institutional question.

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These dynamics contrasted with the apparent increase in institutional participation during a rally last month.

After bitcoin broke the major psychological levels of $ 30,000 in January and $ 50,000 in February, the Coinbase premium saw huge jumps, which according to Du Jun, co-founder of the crypto exchange Huobi, showed a strong follow-up demand from institutions.

The trading volume during the rally over the past few days has been subdued, based on data from eight major crypto exchanges tracked by CoinDesk. It was nothing like the increase in volume brought about by last month’s price fluctuations.

Ether (ETH) was lower on Monday, trading at around $ 1,789.53 and slipping 4.13% within 24 hours from 20:00 UTC (16:00 ET).

The number 2 cryptocurrency according to market capitalization is still largely driven by bitcoin’s price action.

The ether-to-bitcoin ratio has fallen to near 0.030 since the weekend, after rising to 0.046 at the beginning of February, the highest since August 2018.

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“Ether, which uses bitcoin, has failed just below the large $ 2,000 level,” QCP wrote in the market updates. “We expect it to largely underperform bitcoin from here on out.”

Like bitcoin, eaters’ trading volume remained low after rising at the end of February – a low rise in price is usually short-lived.

In the derivatives market, ether futures on major stock exchanges – although higher up to about $ 6.3 billion – were not nearly as high as the level of $ 7.1 billion during the last major rally of Ether to about $ 2000 not.

Digital assets on the CoinDesk 20 are mostly in the red Monday. Notable winners from 20:00 UTC (16:00 ET):