Low volumes are keeping the bitcoin market in the $ 19,000 neighborhood; Options traders are expecting a high ether price in December but are not so convinced of next year.
- Bitcoin (BTC) traded around $ 19,110 at 21:10 UTC (16:10 ET). Earning 0.60% in the previous 24 hours.
- Bitcoin 24-Hour Range: $ 18,360- $ 19,357
- BTC close to its 10 and 50 day moving averages, a sideways signal for market technicians.
The bitcoin market is taking a breather on Wednesday, with flat price action producing a tighter price range between $ 18,360 and $ 19,357 over the past 24 hours. The world’s oldest cryptocurrency is currently at $ 19,110 at press time, according to data from CoinDesk 20.
The sideways movement in prices can be partially attributed to the lighter volume on Wednesday. This was in contrast to earlier in the week, when CoinDesk 20-tracked exchanges recorded two days of volume in excess of $ 2 billion. At press time, the daily volume was $ 1.1 billion.
“The consolidation continues, judging by the signals from the RSI indicators and Bollinger bands,” noted Constantin Kogan, partner of crypto-focused investment firm Wave Financial.
The Relative Strength Index, or RSI, is a technical market momentum indicator and Bollinger Bands use standard deviations of moving averages to predict the performance of an asset. Using these, Kogan anticipates another upward push in prices. “Potentially, another attempt will be made to exceed $ 20,000,” he added.
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“Bitcoin maintains the $ 18,200- $ 19,700 range, reaching its new all-time high yesterday, bringing more volatility and making bitcoin more trending than ever this year,” noted Elie Le Rest, partner of quantum trading firm ExoAlpha. The all-time high price record, set on Tuesday, is now at $ 19,920.53 according to data from CoinDesk 20.
“This market environment reminds us of 2017, but this time it’s different as it wasn’t just driven by retail investors rushing into a new gold mine,” added ExoAlpha’s Le Rest.
In the options market, Wednesday promises to be a day that strongly favors puts (66%) over calls (33%) on bitcoin. This suggests that options traders are putting some protection on possible price downsides. A put is a bearish bet on the price while a call is a bullish bet.
“The dips have occurred multiple times during the 2017 rally and we expect them to repeat multiple times during this bull run as part of the natural market cycle,” said Andrew Tu, a representative of quantum trading firm Efficient Frontier.
Traders are likely to cash out on Wednesday after a strong November.
“The market did not accelerate when it hit record highs twice, so there is clearly a flurry of profit taking at this critical and significant level,” said Jean-Marc Bonnefous, managing partner of the investment firm Tellurian Capital.
Tight days like Wednesday could be part of the bitcoin market in December, Bonnefous added. “I suspect that consolidation in an interval is needed for now until new purchases arrive.”
Bear mode for the price of Ether in 2021?
Ether (ETH), the second largest cryptocurrency by market cap, rose Wednesday, trading around $ 596 and climbing 0.30% in 24 hours at 21:10 UTC (16:10 ET).
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Ether options traders see a 91% probability of ether over $ 400 by the December 2020 expiration. However, in 2021 those price probabilities drop a bit, with traders seeing a 91% probability of ether just beyond $ 280 by March 2021 deadline, according to the Skew aggregator date.
“Until the end of December, there is a more equal distribution of upper and lower interests,” noted Vishal Shah, an options trader and founder of the Alpha5 derivatives exchange. “It could be that the downside is the search for protection. That picture changes beyond the end of the year, where from January onwards there is clear support for high strikes, but there is also a lot of open interest in low strikes.
Digital assets on CoinDesk 20 are mixed on Wednesday. Notable Winners at 9:10 PM UTC (4:10 PM ET):
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- Oil grew by 1.7%. West Texas Intermediate Crude Oil Barrel Price: $ 45.16.
- Gold was up 0.80% and at $ 1.829 at press time.
- The yield on 10-year US Treasuries rose Wednesday to 0.941 and 1.4% in the green.