Market Wrap: Bitcoin Sticks Around $9,200 as Traders Eye Other Markets for Action
Traders look towards altcoins and equities as volatility dips in a quiet July bitcoin market.
- Bitcoin (BTC) trading around $9,185 as of 20:00 UTC (4 p.m. ET). Slipping 1% over the previous 24 hours.
- Bitcoinâs 24-hour range: $9,153-$9,279
- BTC below 10-day and 50-day moving average, a bearish signal for market technicians.
Traders seem to pine for theÂ bitcoin volatility that was once the norm â and they expect it to return after what has been a lull. âTrading bitcoins is about as exciting as sitting in traffic,â said Jack Tan, founding partner of Taiwan-based quantitative firm Kronos Research. âIâm guessing bitcoinâs time will come in the next couple of months, but for now just enjoy the altcoin and equities rallies.â
Read More: CoinDesk Quarterly Review, Q2 2020
Indeed, alternative coins to bitcoin, or altcoins, are picking up traction. Bitcoinâs dominance, a measure of the worldâs oldest cryptocurrency occupies crypto market share, is down to 63%. Itâs a level not seen since Feb. 18, as traders look towards non-bitcoin assets, particularly in the decentralized finance, or DeFI, space.
In addition, stock markets are up today:
- Asiaâs Nikkei 225 in Japan closed up 1.5%, at a one-month high led by gains in automaker Nissan and marketing firm Dentsu.
- Europeâs FTSE 100 in London ended the day up 1.8% on positive news of a coronavirus vaccine trial.
- The U.S. S&P 500 index gained 0.9% as travel stocks and Goldman Sachs ended trading in the green.
Meanwhile, bitcoin continues to trade in stasis around $9,200. âOver the last three months weâve seen lower volatility, and especially over the last 30 days itâs at a historic low for bitcoin,â said Michael Rabkin of Chicago-based crypto trading firm DV Chain. According to data from Skew, bitcoinâs implied volatility, a measure of the future expectation of volatility, has dipped as low as 46% in July.Â
âThis tells you what the market thinks the volatility of bitcoin is based on options pricing â dead in the water,â said Vishal Shah, an options trader and founder of derivatives exchange Alphas5.
Itâs a holding pattern for bitcoin, said Rabkin. âI think given the equity markets being up â in my opinion based on the additional announced quantitative easing â we could see the price rise as investors look for a safe haven asset as coronavirus and trade wars continue,â he told CoinDesk.Â Â
Uniswap offers more trading pairs
Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Wednesday, trading around $237 and slipping 1.5% in 24 hours as of 20:00 UTC (4:00 p.m. ET).Â
The Ethereum-powered decentralized exchange, or DEX, Uniswap is the top-ranking platform by volume at $30 million per day. One of the reasons: trading choice. Andrew Tu of algorithm trading firm Efficient Frontier says with Uniswapâs smart contract upgrade to version 2 in May, the DEX can perform swaps not just from ether-to-token, but also token-to-token on Ethereumâs network. âThis creates much more flexibility in the types of pairs offered,â he said.Â
Uniswap currently offers 351 coins and 794 trading pairs, according to data aggregator CoinGecko. By comparison, second-largest DEX Balancer has 69 coins with 136 pairs. Third place in volume is stablecoin DEX Curve, which offers eight coins and 19 trading pairs. âLiquidity begets more liquidity,â said Tu. âThe more liquidity a venue has, the more it attracts new traders, who add to the pool and create more liquidity.â
Digital assets on the CoinDesk 20 are mixed, mostly in the red Wednesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):Â
Notable losers as of 20:00 UTC (4:00 p.m. ET):
- Oil is up 1.1%. Price per barrel of West Texas Intermediate crude:Â $40.98
- Gold is flat Wednesday, up 0.18% at $1,812 per ounce
- U.S. Treasury bonds were mixed Wednesday. Yields, which move in the opposite direction as price, were down most on the two-year bond, in the red 11%.
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