Market Wrap: Bitcoin fragmented around $ 56,000, early withdrawal seems to cool

Bitcoin on Monday suffered its biggest single-day price drop in more than two weeks, after the effervescence of a recovery led by a retail broker over the weekend that analysts said was notable for its lack of investor participation. institutional.

To date, the price of bitcoin was changing hands around $ 56,671.15 after dropping to $ 54,790.33 during Asian trading on Monday, 11% below Saturday’s record of $ 61,556.59.

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“This settlement took place at the very beginning of trading hours in Asian capital markets,” said John Willock, chief executive of the digital asset exchange Blocktane. “Therefore, it is likely that traders there have repositioned themselves for the beginning of the week, after the race.”

According to data from the crypto derivative analysis website Skew, open bitcoin futures contracts on major retail platforms reached new highs over the weekend. In the CME’s bitcoin futures contract, driven by the institution, however, the number of open contracts was less compared to the levels at the end of February, when the bitcoin price reached $ 58,000 for the first time.

“The new all-time high on Saturday above $ 60,000, coupled with the closure of traditional markets that recently kept bitcoin together, meant a hopeful chase by retail participants,” wrote QCP Capital, a quant based company in Singapore in its weekly market update on March 15. Financing rates on perpetual bitcoin futures – the fees that traders pay for the leverage built into trading instruments – have increased to 200% on an annualized basis, considered to be an “unsustainable level ”, According to the QCP.

The lack of support from institutional investors in the recent boom was also evident in the so-called Coinbase premium. The indicator, tracked by South Korean blockchain data analysis company CryptoQuant, measures the spread between Coinbase’s BTC / USD pair and Binance’s BTC / USDT pair. Over the weekend, it was negative, implying weak institutional demand.

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This dynamic contrasted with the apparent increase in institutional participation during an increase last month.

After bitcoin broke above key psychological levels at $ 30,000 in January and $ 50,000 in February, the Coinbase prize took big leaps, showing strong demand for institutional tracking, according to Du Jun, co-founder of crypto exchange Huobi .

Turnover during the hike in the past few days has been silenced, based on data from eight major spot crypto exchanges tracked by CoinDesk. It was nothing like the volume increase that came with last month’s price swings.

Ether (ETH) fell on Monday, trading around $ 1,789.53 and falling 4.13% in 24 hours from 20:00 UTC (16:00 ET).

Cryptocurrency # 2 by market capitalization is still largely driven by the action of the bitcoin price.

The ether to bitcoin ratio has dropped to close to 0.030 since the weekend, after rising to 0.046 in early February, the highest since August 2018.

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“Ether, following the example of bitcoin, failed below the huge $ 2,000 spot level,” wrote QCP in the market updates. “We hope it will perform much less than bitcoin from here.”

Similar to bitcoin, ether spot trading volume remained stable after peaking in late February – a low volume price increase usually lasts for a short time.

In the derivatives market, open ether futures on major exchanges – although higher to around $ 6.3 billion – were not as high as the $ 7.1 billion level during the last major ether hike to around of $ 2,000.

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