Market Wrap: Bitcoin hangs around $ 18K as Ether stuck in DeFi declines

Bitcoin has stabilized at around $ 18,000 after record volumes on Wednesday, while Ethereum 2.0 may prompt some investors to move ether away from decentralized finance (DeFi).

Bitcoin’s rise in price stalled a bit on Thursday, with the world’s oldest cryptocurrency hitting $ 18,170 before dropping below the $ 18,000 level, but back to $ 18,026 at press time.

The volume contributed to the weakening of price action. At $ 1.79 billion, Wednesday was the day with the highest volume for major USD / BTC spot exchanges since March 13, when volumes reached $ 1.98 billion the day after the “Black Thursday” crash. Today, the daily volume of these trades was a relatively lukewarm $ 867 million.

A volume pullback from the second largest day on the USD / BTC spot market in 2020 is not dissuading analysts from their bullish predictions.

“The current upward movement looks more sustainable than the 2017 bull run as institutional investors are now positioning themselves in bitcoin while in 2017 it was just retail speculation,” said Elie Le Rest, partner of quantum company ExoAlpha. . “Bitcoin confirms with its recent price move that it has a place in a diversified portfolio.”

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“The market infrastructure, regulatory regime and overall maturity are much more robust than in the past,” said John Willock, CEO of Tritium, a cryptocurrency manager. “I fully expect a couple of withdrawals from these nominal mileage indicators like $ 18,000, $ 19,000 and $ 20,000, but I expect that we should see the overall momentum continue for the rest of the year.”

Since October 20, bitcoin’s 30-day volatility has been steadily increasing, indicating that some price swings may still be on the horizon.

“No asset goes parabolic forever,” noted Michael Gord, chief executive of trading company Global Digital Assets. “Bitcoin has risen more than 50% in the past month and a correction is expected.”

“In the long run I am still very optimistic and still see growing interest from more traditional investors in bitcoin and other digital assets,” added Gord.

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Investors are certainly looking to the derivatives market, with bitcoin futures (over $ 6 billion) and options (over $ 4 billion) hitting new highs. CME, a home of professional investors, flirted with $ 1 billion in bitcoin open interest this week, a sign that institutions are increasingly hedging crypto positions.

Even permabulls like Henrik Kugelberg, an over-the-counter cryptocurrency trader based in Sweden, are prepared for some hurdles should bitcoin hit an all-time high.

“I expect a much bigger drop very soon, “Kugelberg told CoinDesk.” But in all I can see BTC going to $ 23,000- $ 24,000 in the next month or two. “

The second largest cryptocurrency by market capitalization, ether (ETH), rose Thursday, trading around $ 475 and rising 0.55% in 24 hours at 21:00 UTC (16:00 ET).

The amount of aether “stuck” in decentralized finance, or DeFi, is decreasing. The fall began on Nov. 14, going from 8.9 million to 7.7 million ETH at press time, according to aggregator DeFi Pulse.

Jean-Marc Bonnefous, managing partner of the Tellurian Capital investment firm, suspects that part of the ether movement outside DeFi could have something to do with Ethereum’s ambitious “2.0” project. This requires some capital allocation to a smart contract to set aside for staking something known as the “beacon chain” to launch the new network.

“There is a need to find an additional 400,000 ETH to complete the first staking phase in ETH 2.0 by the end of November,” Bonnefous said. “So this may explain some of DeFi’s losses.”

Digital assets on CoinDesk 20 are mixed Thursdays, mostly green. Notable Winners at 9pm UTC (4pm ET):

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