Bitcoin has sold for two days in a row, bringing the price close to under $ 31,000. The ether financing rates for leveraged positions are also cooling down after a few very hot weeks.
- Bitcoin (BTC) starts trading at $ 31,850 as of 9:00 PM UTC (4:00 PM ET). 8.9% decrease in the last 24 hours.
- Bitcoin 24-hour range: $ 31,006 to $ 35,656 (CoinDesk 20)
- BTC slightly above the 10-hour moving averages, but well below the 50-hour values on the hourly chart, a sideways too bearish signal for market technicians.
The price of Bitcoin is on the second day of a major sell-off. According to CoinDesk 20 data, the world’s oldest cryptocurrency hits its low at $ 31,006 on Thursday around 2:30 PM UTC (9:00 AM ET). Bitcoin has gained a bit since then, changing hands at $ 31,850 as of press time.
Continue reading: Bitcoin drops to $ 31,000 on sale in the US and Europe
Rupert Douglas, head of institutional sales at crypto-custodian company Koine, said Bitcoin’s decline this week comes after a month of breaking new all-time highs multiple times. “It’s been quite a run,” Douglas told CoinDesk. “I think we will have to withdraw after the last pump.”
The current all-time high for Bitcoin price, set on Jan. 8, is $ 41,962, according to CoinDesk 20 data. In the few weeks following that record – to Thursday’s low – Bitcoin fell over 26%.
Katie Stockton, technical analyst at Fairlead Strategies, continues to see support at $ 25,000 where she sees traders planning to raise some of the assets and raise the price again.
“Yes, Bitcoin is expanding its retreat,” Stockton said. “The $ 25,000 level would be a natural level for buyers to show interest.”
The volatility for Bitcoin has increased. Data from Wednesday’s close of trading shows Bitcoin’s 30-day volatility is back on the uptrend. On January 20, it stood at 88.7%, a level not seen since April 2020 when the coronavirus created uncertainty for all markets across the board, including cryptocurrencies.
Stockton expects Bitcoin’s volatility to continue for a while. “My short-term overbought / oversold measures support another weeks of downward volatility that we would be looking for support for.”
According to Jason Lau, chief operating officer of the San Francisco-based exchange OKCoin, the news is starting to describe bearish signals in the crypto market, including one about the candidate for treasury secretary in the Biden administration. “Comments from Janet Yellen about restricting crypto were another negative headline,” Lau told CoinDesk.
Continue reading: Bitcoin is selling on bearish sentiment, Yellen Worries
In addition, on Wednesday, Bitcoin volumes are among the weakest in the last month. The daily volume on the eight exchanges recorded on CoinDesk 20 was 860 million US dollars at the time of going to press. That’s a poor figure compared to the previous month’s average of $ 4.3 billion.
OKCoins Lau is seeing a lot of sales in the market, with Asia being particularly bearish, he told CoinDesk. However, institutional investors in the US are still reaching for Bitcoin, which is a bright spot.
“For the past few weeks we’ve seen strong and steady selling during Asian trading hours while new capital from North America has been buying the dips consistently during trading hours,” said Lau. “Asian traders appear to be taking profits on price increases, while American investors, mostly institutions, continue to operate in crypto markets and build positions.”
Ether swap funding is coming back to earth
The second largest cryptocurrency by market cap, Ether (ETH), fell on Thursday, trading at $ 1,206, and fell 9.6% in a 24 hour period at 9:00 PM UTC (4:00 PM ET).
After some Ether Perpetual Swaps funding rates hit high levels in January, including BitMEX, which offered a whopping 0.6% + interest rate on January 4th, the numbers are now converging on the spot price drop towards zero.
Funding rates apply to liquidity providers who provide leverage for traders to take long or short positions. If the funding rates were high, it meant that the traders were paying a premium to take a long position. It’s much lower now.
Vishal Shah, founder of the Alpha5 derivatives exchange, says Ether’s previously incredibly high funding rates are proving an all-time high of $ 1,439 per 1 ETH as a result of an overheated market. “I only had a peripheral view, but I’d say the cost of leverage was just too high,” Shah told CoinDesk.
Digital assets on CoinDesk 20 are almost all red on Thursday. The Notable Winner starting at 9:00 p.m. UTC (4:00 p.m. ET):
Continue reading: Kraken adds 26 crypto pairs to capture growing markets in the UK and Australia
- The oil was flat, 0.09% in the green. Price per barrel of West Texas Intermediate Crude: $ 52.99.
- Gold was also flat, in the red at 0.06% and at $ 1,870 at press time.
- The 10-year US Treasury yield rose to 1.102 on Thursday and is in the green 1.6%.