Market Wrap: Bitcoin’s Price and Ether’s Dominance Sit at 2020 Highs
Bitcoin’s price is at its 11-month high as volatility bounces back up. Meanwhile, ether’s dominance has spiked on continued growth in decentralized finance (DeFi).
- Bitcoin (BTC) trading around $10,998 as of 20:00 UTC (4 p.m. ET). Gaining 2.1% over the previous 24 hours.
- Bitcoin’s 24-hour range: $10,573-$11,422
- BTC above 10-day and 50-day moving averages, a bullish signal for market technicians.
The price of bitcoin hit another 2020 high Tuesday, reaching $11,422 on spot exchanges like Coinbase. The last time the price of the world’s oldest cryptocurrency hit that level on Coinbase was Aug. 12, 2019.
“Bitcoin has pushed decisively through not only psychological resistance of $10,000 but also a key level near $10,055,” said Katie Stockton, an analyst at Fairlead Strategies. However, she is skeptical the price can stay over $11,000.
“There are some signs of upside exhaustion on this push higher, so we would be sure to await confirmation of the breakout before adding exposure to bitcoin. This would occur on consecutive weekly closes above $10,055,” she added.
“The Fear and Greed Index is in the ‘extreme greed’ zone, moving towards the overbought level,” noted Konstatine Kogan of cryptocurrency fund of funds BitBull Capital. “The first support is located at the level of $10,000. If bitcoin falls below this mark, then there is a possibility of a subsequent decline,” he added.
Not all stakeholders are suspicious of the bitcoin market’s price run-up. One positive for traders is that volatility is making a comeback, according to data from aggregator CryptoCompare.
“Historical bitcoin volatility has bounced from its lowest point since March 2019,” said James Li, research analyst for CryptoCompare. “The question is whether this is just a temporary bounce or are we heading back to a historical, more volatile BTC market,” he added.
Ethereum dominance hits 2020 high
The second-largest cryptocurrency by market capitalization, ether (ETH), was down Tuesday, trading around $318 after slipping 1.5% in 24 hours as of 20:00 UTC (4:00 p.m. ET).
The dominance of ether in the cryptocurrency market crossed 12% Monday, its highest point in 2020, according to data calculated by real-time charting firm TradingView. Dominance, or the market cap as a percentage of the entire cryptosphere, is a measure traders use to quickly get a sense of a cryptocurrency’s importance relative to the broader digital currency market. Although ether’s dominance has dipped below 12% Tuesday, it’s still higher than it has been all year; the last time ether hit 12% dominance was back in May 2019.
“DeFi users can access that market using stablecoins. But clearly the main core asset fueling the DeFi run is still ether, hence its recent dominance,” said Jean-Marc Bonnefous, managing partner for Tellurian Capital, which has been investing in crypto projects since 2014.“The recent development and ramping up of new and better DeFi applications such as Compound, Aave and Balancer is clearly generating more traction for Ethereum,” he added.
Digital assets on the CoinDesk 20 are mostly flashing green Tuesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):
Notable losers as of 20:00 UTC (4:00 p.m. ET):
- Gold is up 0.75% at $1,956 as of press time after hitting an intraday high of $1,980.
- Oil is down 1.7%. Price per barrel of West Texas Intermediate crude: $40.94
- U.S. Treasury bonds all slipped Tuesday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 11.7%.
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