The above-average spot volume, even last month, is helping to push the price of bitcoin up, at a time when traders are investing in ether futures at a rapid pace to open 2021.
- Bitcoin (BTC) is trading around $ 33,987 starting at 21:00 UTC (16:00 ET). Earning 8.9% in the last 24 hours.
- Bitcoin 24-hour range: $ 29,986- $ 34,220 (CoinDesk 20)
- BTC well above its 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.
Bitcoin’s price gained on Tuesday after a four-hour settlement was reversed around 6am UTC (1am ET). This has led to a steady increase to $ 34,220 so far.
Read More: Bitcoin rises above $ 31,000 after Monday’s fall
“Bitcoin has extended its already high bullish trend to new all-time highs, ”said Katie Stockton, technical analyst at Fairlead Strategies. “The signs of exhaustion that emerged in December were absorbed by a brief phase of consolidation and there are no signs of ‘sale’ of overbought.”
So far, in the five days of 2021, the world’s oldest cryptocurrency has grown by more than 16%.
Stockton still sees “support”, the price floor traders are looking to buy at, much lower than the current spot price.
“Initial support is below $ 25,000, which suggests continued day-to-day volatility,” she said. Since December 31, bitcoin’s perceived volatility has gone up again, from 55.5% to 63.3% on Monday, an increase not entirely uncommon lately, but still something tracked by traders.
“Technically, things have been overbought for some time,” said Andrew Tu, an executive at the cash-trading firm Efficient Frontier. “The general trend is still upward and it seems unlikely that this will change, although the pace may not be the same during the holidays.”
Bitcoin spot volumes appear quite robust; Monday was the highest volume day on the eight CoinDesk 20 exchanges last month, with more than $ 6.6 billion. Tuesday’s spot volume also looks healthy, at $ 4.2 billion at the time of this publication. Last month, volumes averaged $ 2.3 billion a day.
“If bitcoin continues to rise at its current rate, I believe we could see a price of $ 54,000 around Valentine’s Day,” said Nicholas Pelecanos, head of commerce at blockchain ecosystem provider NEM. “We can see a price higher than this at the end of the first quarter; $ 74K is also on my radar. “
Read More: JPMorgan predicts that Bitcoin price could rise more than $ 146,000 in the long run
However, Pelecanos still foresees a possible retreat from these expected high prices. “I have a feeling that a reduction of $ 54,000 would cause the price of bitcoin to consolidate around $ 35,000,” said Pelecanos.
It may be hard to remember, but less than a year ago, during the 2020 settlement in traditional and crypto markets, bitcoin hit a low of $ 3,867, according to data from CoinDesk 20.
“Based on previous cycles, we could have a year or more of extreme high,” said Pelecanos. “With all the cycles, the crash comes from the madness of the crowd. There will be no catalytic news, the market will be without buyers ”.
Boiling ether futures to open 2021
Ether (ETH), the second largest cryptocurrency by market capitalization, rose on Tuesday, trading around $ 1,095 and rising 7.3% in 24 hours from 21:00 UTC (4:00 pm ET) .
Read More: As Bitcoin Rally is paused, DeFi remains surprising
The ether futures market continues to see surprising gains in the first week of trading in 2021. Since Sunday, the amount of ether futures open interest (OI) in major locations has grown by $ 350 million to $ 2.95 billion in total , with Binance leading with $ 734 million in open interest alone.
The record number of open interest contracts can easily decrease, according to Vishal Shah, founder of the derivatives site, Alpha5. “It is just an advantage. It goes off a lot when funding is high and the market is looking for a story as it progresses, ”he told CoinDesk.
Brian Mosoff, chief executive of investment firm Ether Capital, said the spot price of ether still has room for growth, and the growth of futures is a sign of that.
“ETH is still below its historic high and many believe that, with all the positive news in the second half of 2020, it still has room to grow,” said Mosoff. “Ether futures are on the rise, as market sentiment has changed dramatically in recent months. I attribute this to the successful launch of ETH2, macro conditions looking for alternative asset classes to protect pending inflation and a robust ecosystem. “
Other markets
The digital assets in CoinDesk 20 are mostly green on Tuesday. Notable winners from 21:00 UTC (16:00 ET):
- Oil rose 5.6%. Price per barrel of West Texas Intermediate crude: $ 49.98.
- Gold was green at 0.32% and $ 1,948 so far.
- Yield on 10-year US Treasury bonds rose on Tuesday, jumping to 0.948 and green 3.8%.
