[ad_1]
The bitcoin market continues to show weakness; The total frozen value of xDai shows interest in Ethereum’s scaling solutions.
- Bitcoin (BTC) traded around $ 10,285 at 20:00 UTC (16:00 ET). Down by 1.8% in the previous 24 hours.
- Bitcoin 24 hour range: $ 10,250- $ 10,575
- BTC below its 10 and 50 day moving averages, a bearish sign for market technicians.
Bitcoin’s price had been in a tight range since Monday, as the world’s oldest cryptocurrency froze within the $ 10,400 territory on Wednesday before dropping to $ 10,250 just before press time.
Read more: Bitcoin market weakening after sell-off, on-chain data suggests
“September was a unique month in the cryptocurrency markets,” said Elie Le Rest, partner of quantum trading firm ExoAlpha. “Crypto has become much less traded,” he added.
Indeed, after the month opened with a $ 1 billion day rarely seen on major exchanges on September 3, bitcoin volume has weakened. Wednesday it was at $ 202 million at press time.
As the bitcoin market remains lukewarm, the US dollar index, a measure of the greenback against a basket of other fiat currencies, is bouncing from 2020 lows, to 0.40% green at press time.
Cryptocurrency traders love to keep an eye on the strength of the dollar, but many have different views on what the index’s rise might mean.
“I see the dollar index rising as a correction after its performance during the pandemic, “said Alessandro Andreotti, an over-the-counter cryptocurrency trader in Italy.” In the medium and long term, I personally am still optimistic about bitcoin and on precious metals such as gold “.
Henrik Kugelberg, another Sweden-based European over-the-counter trader, said he expects the dollar to become deflationary, where prices for goods and services will drop.
“Now I feel convinced that what we see and will see is deflation and not inflation,” he said. “If that’s correct, people will be selling bonds and buying safer things, like high-end real estate, gold and bitcoin.”
Whatever the dollar trader’s narrative, this is true: based on Federal Reserve data, there are more dollars floating around in the global economy than ever.
As for bitcoin’s tepid performance over the past few days, a loss of momentum for decentralized finance, or DeFi, this week may be partially to blame for a lackluster crypto market. “The recent collapse of DeFi could explain the current market silence for the past couple of days as traders and lenders are trying to figure out the next steps to allocate capital and execute trading strategies,” Le Rest said. ExoAlpha.
The locked xDai value doubles
The second largest cryptocurrency by market cap, ether (ETH), fell Wednesday trading around $ 327 and slipping 4.7% in 24 hours at 20:00 UTC (16:00 ET).
Read more: The data site’s DeFi boost fixes the bug, claims Value Locked hit $ 13 billion last week
Stablecoin xDai, developed through a collaboration between MakerDAO and POA Network, saw a locked value jump to $ 1.2 million Wednesday from $ 559,000 on September 20.
The stablecoin offers features on the Ethereum network with lower rates and without the hassles of slow block confirmations, a problem with DeFi growth. xDai accomplishes this by acting as a “sidechain” off the main Ethereum blockchain network, where transactions have often clogged the system during high transaction activity over the past few months.
XDai could be a tool for traders to better navigate DeFi in high transaction times, said Brian Mosoff, chief executive of investment firm Ether Capital. “As we have seen in recent months, the use of Ethereum has skyrocketed, bringing with it rising gas costs,” Mosoff said. “Many use cases and participants can be better served by using xDai, it offers an out-of-the-box scaling solution that allows people to stay in the Ethereum ecosystem.”
Other markets
Digital assets on CoinDesk 20 are mostly on Red Wednesday. A notable winner at 8pm UTC (4pm ET):
Notable Losers at 20:00 UTC (16:00 ET):
Read more: Crypto Fund seeks $ 50 million to buy DeFi tokens amid the market pullback
- Oil fell 0.45%. West Texas Intermediate Crude Oil Barrel Price: $ 39.54.
- Gold was 2% in the red and at $ 1,860 at press time.
- US government bond yields all fell on Wednesday. Yields, which move in the opposite direction with respect to the price, decreased more in the two-year period, in the red by 1.4%.
