Market Cover: Bitcoin up to $ 26,000, but traders remain bullish

Few people seem to be bothered by the volatility of bitcoin on Tuesday as the number 1 cryptocurrency declined through market capitalization to the $ 26,000 level after trading more than $ 28,000 for the first time on Sunday. Many market participants are convinced that small and institutional investors will push the price of bitcoin higher after the holidays.

  • Bitcoin (BTC) trades at $ 26,937.67 from 21:00 UTC (16:00 ET). Increased by 0.37% in the last 24 hours.
  • Bitcoin’s 24-Hour Series: $ 25,875.05- $ 27,117.95 (CoinDesk 20)
  • BTC between its averages of 10 hours and 50 hours on the hourly chart, a sideways signal for market technicians.

Bitcoin has been trading on Bitstamp since December 23
Source: TradingView

With limited institutional trading activity during the last days of 2020, traders and analysts told CoinDesk that the recent price movement is largely driven by retail investors.

‘It’s very unusual for this to be the case this past week, as it’s a holiday season. “Usually there’s a liquidity problem during the holiday season,” Mable Jiang, head of the crypto-hedge fund Multicoin Capital, told CoinDesk. the market, at least in China. ‘

Jiang has seen some patterns in recent trading activities among retail investors. Some roll alt-coins in bitcoin and ether. Others are looking for coins that could potentially outperform bitcoin on returns in the coming months.

Bitcoin volumes per exchange since December 1, 2020
Source: CoinDesk, CryptoCompare

In TradeBlock’s weekly market commentary on December 28, the cryptocurrency analysis firm wrote that recent highs for bitcoin and ether were driven by XRP outflows.

‘The only two digital currencies that the [Securities and Exchange Commission] has definitely stated that securities are not bitcoin ”and ether, TradeBlock said. ‘As regulatory uncertainty increased in the alt-currency market following SEC action [against Ripple Labs, claiming it was trading an illegal security, XRP], traders took the opportunity to pile up more regulatory assets, bitcoin and ether, while retaining exposure to crypto amid one of the strongest records.

Read more: Coinbase to suspend XRP trading following SEC suit against wrinkle

Although bitcoin’s price has fallen below $ 26,000 in the last 24 hours, it appears that many market participants are optimistic about the coming weeks and months, especially after the return on investment activity after the holidays.

“If the expected wave of retail flows were to materialize, I would expect bitcoin to charge more than $ 30,000 as we enter the new year,” said Denis Vinokourov, head of research at London’s Prime Minister Brokerage Bequant.

Read more: CME is the best in Bitcoin Futures rankings amid rapidly growing institutional interest

According to Chris Thomas, Head of Digital Assets at Swissquote Bank, last month’s price move toward the previous $ 20,000 resistance level is a compelling case. While small sales occurred three times during the rally (on November 25, December 1, and December 5), prices recovered rapidly as strong demand for bitcoin outweighed the amount of bitcoin sold.

Read more: Whale watching becomes rare and removes the downward pressure on Bitcoin: analyst

“Since then, the bears have been reluctant to sell too much more because the likelihood is that they will be able to sell at higher levels within a few weeks or months,” Thomas said. ‘I suspect we’ll see a range of $ 26,500 to $ 27,500 in the first few days of the new year. We need to see on January 4 that institutional positions come back into the market. ”

Read more: Gray Scale has $ 19 billion in Crypto Assets Managed, up from $ 16.4 billion last week

Ether lower than active retail activity

The second largest market capitalization cryptocurrency, ether (ETH), was lower on Tuesday and traded around $ 728.59, down 0.47% in 24 hours from 21:00 UTC (16:00 ET).

Like bitcoin, market sentiment for ether’s performance remained positive despite price volatility.

Read more: Ether trades for more than $ 700 for the first time since 2018

Ethereum volume since December 1, 2020
Source: CoinDesk, CoinGecko

‘At the moment [ether’s] the trading volume is more than 15% higher than average, further proof that ether is increasing, ‘said Guy Hirsch, eToro’s US managing director. “We expect the second-largest crypto asset to continue in the new year and possibly exceed $ 800 in the first half of the year.”

If they have not already done so, institutional players could also start exploring ether soon, especially after the Chicago Mercantile Exchange (CME) said it would launch a futures contract on ether in February 2021. This could predict for ether’s performance relative to bitcoin, according to some analysts.

Read more: Messari Analyst says institutions will buy Ether in 2021

“The imminent introduction of CME group ETH futures contracts should encourage additional acceptance, especially among financial institutions that want to diversify digital assets with another regulated product with which they are comfortable,” Vinokourov said. ‘This, combined with [decentralized finance’s] continued upswing, should help ETH outperform BTC in the foreseeable future. ”

Retailers also appear to be more interested in ether, as the total closed value (TVL) in DeFi, as provided by analytics website DeFi Pulse, as of Tuesday is $ 14.47 billion.

Total value included in decentralized financing since January 2020.
Source: DeFi Pulse

‘From the marketing side [on DeFi], we see flow fairly evenly, with slightly more [stablecoins] to ether than the opposite, which in my opinion indicates that there are still many small investors trying to jump on the bandwagon, ”said Peter Chan, a trader at Hong Kong crypto firm OneBit Quant, which focuses on DeFi trading.

Other markets

Digital assets on the CoinDesk 20 are mostly in red on Tuesday. Known winner from 21:00 UTC (16:00 ET):

  • Oil rose 0.76 %%. Price per barrel West Texas Intermediate Crude Oil: $ 47.98.
  • Gold was up 0.31% in green and at $ 1879.03 at the time of printing.
  • U.S. treasury yields for ten years fell Tuesday to 0.931.

The CoinDesk 20: The Most Valuable Assets on the Market