Market Wrap: Bitcoin drops below $ 19,000 as Ether options volume declines

Some bitcoin sales on Friday caused its price to drop. Ether options traders seem less likely to place bets on the asset’s price, as evidenced by the lower Deribit volume.

Bitcoin prices slid to sell volume around 10:00 UTC (5 am ET) on Friday, pushing the price below $ 19,000, albeit temporarily. It was up to $ 18,975 at press time.

Low spot volumes on CoinDesk 20 exchanges are plaguing the market for a third consecutive day, with the daily volume of $ 973 million on Friday at press time less than $ 1.1 billion on Thursday in daily volume and 1.3 billions of dollars on Wednesday in trading activity on eight major exchanges.

However, spot trading often belies the impact of the institutional market, which often uses over-the-counter or quantitative strategies to raise bitcoin, noted Joel Edgerton, chief operating officer of cryptocurrency exchange bitFlyer. “We are watching Grayscale and PayPal continue to suck BTC, but volumes should be lighter over the weekend as traders evaluate their positions,” Edgerton said. (Grayscale is a sister company of CoinDesk.)

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Some tax profit-taking may be in store for the December balance, Edgerton added. “We are also getting to the point where investors in the US are starting to review their portfolios from a fiscal optimization perspective, which could lead to selling pressures in the US in the coming weeks.”

“Bitcoin has had a good run over the past couple of months, so a pause or even a withdrawal is and has been expected,” said Elie Le Rest, partner of quantitative trading firm ExoAlpha. He also suspects that there will be further sell-offs as various market participants such as miners or long-term holders may be looking to trade cryptocurrencies for cash. “The interest is to sell in a strong market to reduce their negative impact on the market,” he said, “but as markets look weak, they may not sell right now.”

According to data from the Glassnode aggregator, the number of bitcoin addresses withdrawn from exchanges is much less than those deposited so far this year. Glassnode calculates that over 200,000 separate addresses were recipients of transactions that received funds from exchanges in 2020.

Meanwhile, so far in 2020 over 700,000 addresses have appeared as senders in transactions sending bitcoins to exchanges.

More bitcoin will enter exchanges than coming out, at least according to Glassnode data. What traders intend to do with these balances is anyone’s guess, but ExoAlpha’s Le Rest also reiterated the potential for December profit taking. “After a torrid bull run, a lateral pullback or even 15% is certainly expected before a new bull run can take place.” Le Rest added.

Ether (ETH), the second largest cryptocurrency by market cap, fell on Friday, trading around $ 588 and slipping 4% in 24 hours at 21:15 UTC (16:15 ET).

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After a surge in the volume of ether options on the Deribit derivatives headquarters in late November, market interest appears to have dissipated, according to Greg Magadini, chief executive of data aggregator Genesis Volatility. “Volumes are decreasing and implied volatility is decreasing. There is no clear decision at the moment, “Magadini told CoinDesk.

“Traders are taking a ‘wait and see’ approach right now in the ETH options market,” added Magadini. He noted that traders aren’t even that interested in downside protection in the form of put options. This is an indicator that many options traders are expecting the price of Ether to start rising again. “Since ETH retraces less than $ 600, no one is thrilled to buy puts,” he said.

Digital assets on CoinDesk 20 are mixed on Friday, mostly red. Notable Winners at 9:15 PM UTC (4:15 PM ET):

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