Bitcoin is back again on the bull run while ethereum has hit a new ATH and traders see it has room for the growth.
Bitcoin trading is around $37,092 as of 21:00 UTC (4 p.m. ET). Gaining 3.4% over the last 24 hours.
BTC 24-hour range: $35,416-$37,245
Bitcoin above the 10-hour and 50-hour moving averages on the hourly chart, a bullish gesture for market technicians.
BTC price was on the second day of a bull run, with the world's oldest yet the most popular cryptocurrency touching as high as $37,245, according to CoinDesk 20 data. It was changing from $37,092 as of the press time.
“While BTC did break back below $30,000 very briefly during the period of consolidation over the last weeks, the fact that it didn’t break down entirely is inherently bullish,” told Chad Steinglass, head of trading at CrossTower Capital.
Bitcoin has closed over $30,000 everyday for over a month. On CoinDesk’s candle charts, which shows a fuller picture of price orders in trading, every time bitcoin ducks under $30,000 very soon it picks back up to the level.
Often technical analysts refers this phenomenon as “support,” the area where traders have orders placed or will start buying in, normally because they feel that a tremendous price point is enticing.
“There seems to be a strong and highly priced buying from institutions and technical bids just below $30,000 that gives some decent support which takes out the aspiring shorts,” said Jean-Marc Bonnefous, managing partner for Tellurian Capital.
By analysing liquidations, which is automated crypto leverage margin calls on derivatives venue BitMEX, it’s sure there has been a larger proportion of short versus long positions eliminated in the past few weeks.
From $1.1 billion in BTC liquidations the past month, 63% of that amount have been short-oriented wipeouts.
CrossTower’s Steinglass speaks large buyers are helping to maintain the price levels and are now pushing it up higher. “After the brief pop from the buzz generated by Elon Musk’s tweet and support, we are seeing another round of institutional support led largely by MicroStrategy’s Michael Saylor,” added Steinglass.
“While we wouldn’t rule out another poke back above $40,000, we think the balance of risk over the coming weeks actually leans more towards an expectation for a choppy consolidation phase than anything else,” Kruger said “Medium- and longer-term technical studies confirm this outlook as they are still quite elevated following the parabolic run-up into January.”
Kruger further added “We believe that when it comes to consensus and adoption in the cryptocurrency space, everything runs through bitcoin, where traders who perhaps felt like they had missed out on bitcoin, they looked to take advantage of the trend by way of ether.”
An interesting development: Futures open interest on CME, a platform that caters to institutional investors, has dropped 29% to $1.7 billion since hitting an all-time high of $2.4 billion in open interest on January 14.
“Catching up on bitcoin’s recent surge, it seems that there is plenty of room for ETH to grow and to try new all-time highs in the coming days and weeks,”said Elie Le Rest, partner at quantitative trading firm ExoAlpha. “With [decentralized finance] being a hot topic supported mainly by Ethereum technology and [with] ETH 2.0 moving forward, a significant ETH price surge throughout 2021 is highly anticipated.”
This booming price of ether has stirred up options activity on bellwether venue Deribit, reported Greg Magadini, chief executive officer of data aggregator Genesis Volatility. “Traders are paying relatively more for the ‘speculative options’ in anticipation of bigger market moves,” he told CoinDesk.
Deribit’s launch of $10,000-strike ether contracts in this January is an example of this; more than 8,000 ETH in calls at that strike price are open as of press time.
“These calls were recently released by Deribit and there is already a lot of activity,” Magadini told CoinDesk. “Quintuple-digit ETH prices are starting to enter the market’s psychology.”