Bitcoin has been in the $ 30,000 to $ 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 perceived lull.
- Bitcoin (BTC) starts trading at $ 32,003 as of 9:00 PM UTC (4:00 PM ET). 4% decrease in the last 24 hours.
- Bitcoin’s 24-hour range: $ 30,875 to $ 32,967 (CoinDesk 20)
- BTC above the 10-hour average but below the 50-hour moving average on the hourly chart, a sideways signal for market technicians.
Bitcoin’s price fell to just $ 30,875 at 15:00 UTC (10 a.m. ET) on Tuesday before rising again, changing hands at $ 32,003.
The decline came after the world’s oldest cryptocurrency hit nearly $ 35,000 on Monday, noted Constantine Kogan, partner at investment firm Wave Financial, who is also bearish on current market conditions. “I expect a drop to $ 29,000,” he told CoinDesk. “Apparently some of the owners and whales have sold their positions.”
Kogan noticed some positive news this week that didn’t move the Bitcoin market much. “Marathon has invested $ 150 million in Bitcoin and aims to become the greatest miner in the world, ”he said. “Crypto funds are setting records, but at the same time there has been no growth.”
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The last time Bitcoin was above $ 35,000 was almost a week ago on January 20th, according to CoinDesk 20 data.
“Many crypto locals and macro traders were expecting a decline of ~ 30% from the all-time high two weeks ago,” said Brian Mosoff, CEO of investment firm Ether Capital. “Now that it seems to have stabilized in the low $ 30,000 positions, traders see this as an opportunity to step up and get way ahead of the next leg.”
Tuesday seemed like a fair day for long leverage on Bitcoin as funding rates were down a bit from Monday. This was a change from the excitement over the past 90 days when margin rates at some venues rose from $ 40,986 to over 0.2% during the insane price spike to the all-time high of January 10th.
Some use the valuation of Bitcoin compared to other cryptocurrencies as a signal for market development.
“I have a strong view of ether as a leading indicator of an upcoming alt season,” Zachary Friedman, chief operating officer of Global Digital Asset, told CoinDesk, referring to market conditions favoring “alts,” or alternative cryptocurrencies.
Friedman pointed out that Bitcoin’s dominance, its share of total crypto market cap, is declining. In fact, Bitcoin dominance has dropped more than 10% since early 2021.
“BTC’s dominance is diminishing as profits are redistributed and ETH, near its all-time high, presents an immediate opportunity for new entrants to diversify their holdings and generate additional returns,” added Friedman.
Bitcoin flows back into decentralized financing
Ether (ETH), the second largest cryptocurrency by market capitalization, was trading at around $ 1,340 on Tuesday and fell 2.2% in the space of 24 hours at 9:00 PM UTC (4:00 PM ET).
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On Monday, the amount of Bitcoin held in decentralized finance (DeFi) exceeded 40,000 BTC for the first time since mid-December. At the time of going to press, 42,604 BTC was “locked” in DeFi, which investors do to get a “return” in exchange for providing liquidity.
Ether Capital’s Mosoff says the rotation back to DeFi is simply investors looking for juicier opportunities as the market for Bitcoin appears to be in a doldrums.
“Owners expect an” old season “and would like to use their Bitcoin to use additional opportunities for other opportunities in the crypto space, be it for DeFi tokens or other layer 1s such as Ethereum, Polkadot, Solana, NEAR etc.” Said Mosoff. “Many of these projects are currently very dynamic and are well positioned for investor participation.”
Digital assets on CoinDesk 20 are mostly red on Tuesday. Notable Winners as of 9:00 PM UTC (4:00 PM ET):
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- Oil was down 0.66%. Price per barrel of West Texas Intermediate Crude: $ 52.50.
- Gold was in the red at 0.23% at press time and at $ 1,851.
- The US 10-year Treasury yield rose to 1.038 on Tuesday and is in the green by 0.84%.