Bitcoin had a four-day losing streak, appearing to stabilize at around $ 34,000. After the recent market correction, cryptocurrency prices are still up 18% year-to-date, against a 1.2% gain for the Standard & Poor’s 500 Index of major US stocks.
“It’s probably not time to panic,” wrote Matt Blom, head of sales and trading at cryptocurrency exchange Diginex, in a daily bulletin.
In traditional markets, European stocks fluctuated and U.S. stock futures changed little, as the U.S. House of Representatives prepared on Wednesday to vote on a second impeachment for President Donald Trump. Gold appreciated 0.1% to $ 1,855 an ounce.
Market movements
As bitcoin and ether retreat from recent highs, the strong performance of other cryptocurrencies shows that traders and investors may now be turning to alternative tokens, often called “altcoins”, to get returns.
Bitcoin prices on January 11 were at about 87% of their historic high reached last week, and ether is about 78% of the way towards its high a few years ago, based on data compiled by CoinDesk Research.
But other cryptocurrencies and digital assets, like stellar (XLM) and litecoin (LTC), are still far from setting new records. One conclusion may be that they need to run even more, reported Muyao Shen of CoinDesk on Tuesday.
Altcoins are emerging “in ways we haven’t seen since 2017,” said Andrew Tu, executive at quantification firm Efficient Frontier, Shen.
It is possible, of course, that some novice investors who view the $ 34,000 price of bitcoin – which costs a small sports utility vehicle – may not know that the largest cryptocurrency can be purchased in fractions of minutes, similar to the way it is possible buy $ 100 or $ 1,000 gold.
Such confusion in the past has led some novice investors to turn to altcoins, because their prices tend to be comparatively lower, sometimes counted in cents.
David Derhy, an analyst at the eToro trading platform, wrote earlier this week that some traders may switch to ether, the base cryptocurrency for the Ethereum blockchain.
“Bitcoin investors may be looking to make some profits and reallocate, and ether can be a target,” he wrote. “A target of $ 2,500 is reasonable, given the gains we’ve seen and the current price surge.” This level would represent a gain of almost 150% over the current price.
Simplex, a digital asset platform, has seen “an increasing demand for cryptocurrencies across all sectors”, although “retail investors seem to be looking for the next BTC,” wrote CEO Nimrod Lehavi in a Google document, sent by a spokesperson via Zoom chat function.
“We are used to seeing BTC dominate about 90% of the total volume of trade,” says Jonathan Leong, CEO of BTSE, another cryptography platform. “But in recent weeks there has been an increase in demand and interest from our institutional clientele for altcoins, with the balance being almost 50/50 at certain times.”
Bitpanda, an Austrian cryptocurrency platform, saw bitcoin drop to between 30% and 40% of customer purchases this year, from 40% to 50% last year, according to a spokeswoman.
“We have a large flow of users, and they are trading bitcoin and altcoins,” said spokeswoman Sara Moric by email.
– Muyao Shen and Bradley Keoun
Read more: Multiple tokens See Rally amid ‘alternative season’
Bitcoin Watch
The short-term outlook for bitcoin has diminished, analysts say, with some now seeing a possible extension of Monday’s big price drop.
“There may be another dump, as outflows from the Coinbase Pro cryptocurrency exchange dried up along with an increase in the transfer of currencies to exchanges,” said David Lifchitz, investment director at ExoAlpha, a Paris-based quantitative trading company, to CoinDesk.
Outflows from Coinbase Pro – considered a proxy for cryptocurrency purchases by large institutional investors, as outflows are typically seen as transfers to cold storage for long-term maintenance – have fallen dramatically from the three-year high 55,000 BTC observed in January 2
The drop could signal a weakening of institutional demand, which played a key role in raising bitcoin last week to a new record above $ 41,000, from about $ 10,000 just a few months ago.
Meanwhile, currency deposits have picked up pace, a sign that some investors may be looking to liquidate their assets and realize profits.
The number of coins held on exchanges increased by more than 57,000 BTC on Tuesday, the biggest single-day change since March 2020, according to data from blockchain analyst firm Chainalysis. Exchanges recorded an average inflow of 103,000 BTC per day for the past seven days – higher than the 180-day average of 83,700 BTC.
Some analysts looking for clues to the price chart’s patterns are also calling for an extension of Monday’s decline. The Ichimoku cloud, a technical analysis tool created by Japanese journalist Goichi Hosoda in the late 1960s, includes several lines that help to identify support and resistance levels and other essential information, such as the direction of the trend and the moment. “
“I still see pressure on the downside in the short term,” said Patrick Heusser, head of trading at Swiss company Crypto Finance AG, adding that $ 29,000 could be the level of success or failure. “Things can get ugly if that support is violated,” said Heusser. A price of $ 36,000 is the level to be beaten for bulls.
Chris Thomas, head of digital assets at Swissquote Bank, sees a period of price consolidation for the remainder of this week, in the range of $ 33,000 to $ 36,000.
Read more: Analysts are concerned about Bitcoin’s short-term price outlook at the moment
What’s new
European Central Bank Lagarde calls bitcoin a “speculative asset”, hope for the digital euro in no more than five years (CoinDesk)
“Could the OCC grant an authorization from a national bank for open source software that manages receipt of deposits, loans or payments, if it does not have executives or directors?” writes US Currency Controller Brian Brooks in an opinion piece. “Not yet. According to current law, drafted based on the premises of the early 20th century, letters can only be issued to human beings” (Financial Times)
When Goldman Sachs’ head of commodities research tries to evaluate cryptocurrencies, he starts by imagining the sector doubling to $ 2T (CoinDesk)
Volume of Bitcoin options in Deribit already 25% of the total of 2020 (CoinDesk)
Bitcoin whales continued to accumulate during Monday’s fall (CoinDesk)
Coinbase apologizes for “recent customer experience issues” in the UK and the EU (Coinbase)
Tron is out, Dai is back, in the latest changes to CoinDesk 20 (CoinDesk Research)
“For all the billions that we have in place now, if you withdraw subsidies (paying for users), that number will collapse,” writes YearnFinance creator Andre Cronje in a Medium (Medium) post
CEX, lies and videotape: Binance accuses rivals of dirty fighting (CoinDesk)
The Gemini cryptocurrency exchange of the Winklevoss twins has made a big jump over last year in bitcoin balances (currency metrics):
Analogs
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