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Bitcoin’s price topped $ 12,000 for the first time since September when Ethereum’s fees dropped.
- Bitcoin (BTC) traded around $ 11,910 at 20:00 UTC (16:00 ET). Gain of 1.8% compared to the previous 24 hours.
- Bitcoin 24 Hour Range: $ 11,673- $ 12,058
- BTC above its 10 and 50 day moving averages, a bullish sign for market technicians.
Bitcoin’s price continued to gain on Tuesday after Monday’s steady price appreciation. The world’s oldest cryptocurrency breached $ 12,000 at around 5pm UTC (1pm ET), hitting as high as $ 12,058 before settling at $ 11,910 at press time.
The last time bitcoin was over $ 12,000 it returned on September 1, according to Bitstamp spot prices. (CryptoCompare, using the index-weighted price, places it as of Aug.19.) David Lifchitz, chief investment officer at ExoAlpha, says bitcoin could hit $ 12,500 soon, but it faces a struggle. “The true resistance level is around $ 12,500, so until a significant breakout above that level, nothing is done, $ 12,000 is just a psychological level.”
Lifchitz said that although the price level is substantial, it could lead bitcoin to remain in a side pattern around this level similar to when it crossed $ 10,000. “Bitcoin, which held over $ 10,000 for more than two consecutive months, was a bullish sign, even though it was trading sideways in a range of $ 2,000.”
However, the last time bitcoin was trading below $ 10,000 on the spot market was on September 9th. This figure appears to strengthen the confidence of some investors.
“We continue to break the record every day for the longest run of bitcoin trades above $ 10,000, so overall investor confidence is growing, I believe,” said Michael Gord, chief executive of trading firm Global Digital Assets.
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Bill Noble, cryptocurrency strategist for analytics firm Token Metrics, said the momentum is shifting from decentralized finance based on Ethereum, or DeFi, to bitcoin. “ETH and DeFi are watching BTC wake up like a sleeping giant,” he said. “BTC’s move to $ 12,000 is sending the altcoin universe to seek hedging.”
The dominance of Bitcoin, a metric that calculates the share of cryptocurrency relative to other assets on the market, has been increasing since the beginning of October. The last time the domain was at this level was in late August.
“Although there is positive sentiment around BTC, bullish runs usually lead to a bear market in alternative currencies,” noted Melvis Langyintuo, a market strategist for San Francisco-based cryptocurrency exchange OKCoin.
Market conditions may mean that DeFi discounts could develop for traders, Token Metrics’ Noble noted. “A BTC move above $ 12,000 could result in a DeFi drop that may be greater than most expect,” he said. “Any such move could be a golden opportunity to pick up survivors of the DeFi shock at discounted prices.”
Ethereum fees go cheap, for now
The second largest cryptocurrency by market capitalization, ether (ETH), fell on Tuesday to around $ 369 and slipped 2.6% in 24 hours at 20:00 UTC (16:00 ET).
Read more: Validators abandon Ethereum 2.0 testnets as mainnet release approaches
On Saturday, October 17, the average daily rate on the Ethereum network hit a three-month low, at 0.00246199 ETH. This is a level not seen since July 12, when the average was 0.00211437 ETH. Fees, which are rising from Sunday’s low, are required on Ethereum to send transactions, even to smart contract-based DeFi platforms.
Jean-Marc Bonnefous, managing partner of Tellurian Capital, an investment firm that has been following cryptocurrencies since 2014, said the deflation of the DeFi hype is causing a decrease in fees. “Gas tariffs are lower as the recent enthusiasm for DeFi tokens, [decentralized exchanges] is [automated market makers] it has hit a wall for now, “Bonnefous told CoinDesk.
If DeFi overheats, expect higher fees, Bonnefous added. “We could be for a few weeks of consolidation before another upward push for DeFi tokens, which will most likely see gas costs rise again. The problem of high gas tariffs will not disappear without structural improvements.”
Other markets
Digital assets on CoinDesk 20 are mixed, mostly red on Tuesday. Notable Winners at 8pm UTC (4pm ET):
Notable Losers at 20:00 UTC (16:00 ET):
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- Oil increased by 2%. West Texas Intermediate Crude Oil Barrel Price: $ 41.49.
- Gold was up 0.32% and at $ 1.909 at press time.
- US government bond yields were mixed on Tuesday. Yields, which move in the opposite direction to the price, fell more on the two-year bond, dropping to 0.145 and in the red to 5.2%.
