Market Wrap: Bitcoin drops to $ 30.8K as investors put BTC back on DeFi

Bitcoin has been in the $ 30,000- $ 35,000 range for almost a week at a time when some market participants are looking for ether and other crypto to trade during the apparent stagnation.

Bitcoin’s price fell on Tuesday, reaching $ 30,875 at around 15:00 UTC (10:00 ET) before rising again, changing hands around $ 32,003.

The drop came after the world’s oldest cryptocurrency reached almost $ 35,000 on Monday, noted Constantine Kogan, a partner at investment firm Wave Financial, which is also pessimistic in current market conditions. “I expect a decline to $ 29,000,” he told CoinDesk. “Apparently, some of the cardholders and whales sold their positions.”

Kogan noted some positive news this week that did not move the bitcoin market much. “Marathon invested US $ 150 million in bitcoin and intends to become the largest mining company in the world, ”he said. “Crypto funds are setting records, but there has been no growth at the same time.”

Read More: Crypto Miner Marathon Patent Group buys $ 150 million in Bitcoin

The last time bitcoin exceeded $ 35,000 was almost a week ago, on January 20, according to data from CoinDesk 20.

“Many native crypto and macro traders were anticipating a drop of approximately 30% from the historic record of two weeks ago,” noted Brian Mosoff, chief executive of investment firm Ether Capital. “Now that it appears to have stabilized at the $ 30,000 low, traders are treating this as an opportunity to leverage and trade long ahead of the next bullish step.”

Tuesday seemed like a day with fair prices for a long bitcoin leverage, as funding rates have dropped slightly since Monday. This was a departure from the excitement of the past 90 days, when margin rates could reach more than 0.2% in some places during the crazy price race up to the historic January 10 high of $ 40,986.

Some are using bitcoin’s valuation against other cryptocurrencies as a sign of what’s to come on the market.

“I have a strong feeling about the ether as an important indicator for an alternative next season,” Zachary Friedman, chief operating officer of Global Digital Asset, told CoinDesk, referring to market conditions that favor “alts” or alternative cryptocurrencies.

Friedman pointed out that bitcoin’s dominance, its share as a percentage of the total market value of cryptography, is falling. In fact, since the beginning of 2021, bitcoin’s dominance has fallen by more than 10%.

“BTC’s dominance is falling as profits are redistributed and ETH near its peak presents an immediate opportunity for new market participants to diversify their holdings and seek additional income,” added Friedman.

Ether (ETH), the second largest cryptocurrency by market capitalization, fell on Tuesday, trading at around $ 1,340 and falling 2.2% in 24 hours from 21:00 UTC (16:00 ET).

Read More: Big Guns Back $ 10M Investment in DeFi’s dYdX

On Monday, the amount of bitcoin held in decentralized finance, or DeFi, exceeded 40,000 BTC for the first time since mid-December. So far, 42,604 BTC were “stuck” in DeFi, which investors do to earn “income” in exchange for providing liquidity.

Eoff Capital’s Mosoff says the rotation back to DeFi is simply investors chasing more succulent opportunities as the bitcoin market appears to be in a lull.

“Holders are anticipating the ‘alternative season’ and want to use their bitcoin to take advantage of additional exposure to other opportunities within the cryptographic space, be it DeFi tokens or other 1s layers, such as Ethereum, Polkadot, Solana, NEAR, etc.” Said Mosoff. “Many of these projects have a lot of momentum at the moment and are well positioned for investor participation.”

The digital assets in CoinDesk 20 are mostly red on Tuesday. Notable winners from 21:00 UTC (16:00 ET):

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