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Bitcoin is knocking on the doors of $ 17,000 as Ethereum’s transaction growth in 2020 is a positive indicator of future financial use cases.
- Bitcoin (BTC) traded around $ 16,829 at 21:00 UTC (16:00 ET). Gain of 6.1% compared to the previous 24 hours.
- Bitcoin 24 Hour Range: $ 15,792- $ 16,851
- BTC above its 10 and 50 day moving averages, a bullish sign for market technicians.
Bitcoin’s price made big gains on Monday, turning bullish from a weak weekend and hitting $ 16,851, according to data from CoinDesk 20.
Read more: Citibank analyst says Bitcoin could exceed $ 300K by December 2021
“Bitcoin accelerated to the upside on short-term positive momentum, supporting overbought conditions following its recent break above the former 2019 resistance,” said Katie Stockton, technical analyst at Fairlead Strategies.
Momentum, measured in volume form, was $ 688 million at press time, higher than last month’s daily average of $ 404 million on major exchanges.
“The next resistance is the 2017 final resistance near $ 19,500,” Stockton added. Based on data from CoinDesk 20, the last time bitcoin was at this price level was on January 6, 2018, when the daily high was at $ 17,211.
In addition to bitcoin’s bull run, global stocks also rose across the board on Monday, backed by positive economic news – and promising results for another COVID-19 vaccine – in the face of a resurgence of the coronavirus pandemic:
According to several analysts, the rising value of bitcoin is also giving the world’s oldest cryptocurrency increasing use as a store of value for loans, whether by centralized players or in decentralized finance, or DeFi. From November 2019, the amount of bitcoin “stuck” in DeFi, for example, skyrocketed from 1,422 to 174,673 BTC, an increase of 12,183%.
“The loan gained popularity in 2020 with players like Nexo, BlockFi and others experiencing strong year-round growth,” said Jean Baptiste Pavageau, partner of quantum trading firm ExoAlpha. “DeFi also allows the retail market to access those popular lending solutions thanks to the Ethereum network.”
“It actually provides a strong use case for BTC beyond the digital gold narrative, as it is used as a pooling and yield tool,” said Vishal Shah, an options trader and founder of the Alpha5 cryptocurrency exchange. Shah also speculates that all this bitcoin on the Ethereum blockchain could decrease the separation between blockchains. “It can actually create a chain agnostic paradigm.”
Uniswap, tether dominates Ethereum transactions
Ether (ETH), the second largest cryptocurrency by market capitalization, rose on Monday trading around $ 462 and climbing 4% in 24 hours at 21:00 UTC (16:00 ET).
Read more: MakerDAO Loans can be used to withhold funds from liquidation
Since early July, the Ethereum network has averaged over a million transactions per day, according to data aggregator Glassnode. That number of transactions was first experienced three years ago during the 2017-2018 crypto market bubble.
Token trading and stablecoins are a big part of this, as 35% of the network’s transactions are on Uniswap (18.93%) and involve tether (16.42%) on Monday, according to Eth Gas Station.
“I think this is proof of the continued traction Ethereum saw as a platform during the second half of 2020,” noted Ben Chan, vice president of engineering for Oracle provider ChainLink.
Uniswap’s transaction dominance, in particular, is a bullish sign on decentralized finance, or DeFi, according to Chan. “Unlike tether, which can shift to other chains, DeFi is stickier because the ecosystem’s resources and components perpetuate a network effect by themselves.”
Other markets
The digital assets on CoinDesk 20 are all green Monday. Notable Winners at 9pm UTC (4pm ET):
Read more: The SEC is still trying to figure out what “qualified custodian” means for Crypto
- Oil increased by 3%. West Texas Intermediate Crude Oil Barrel Price: $ 41.31.
- Gold was in the red by 0.12% and at $ 1.886 at press time.
- The yield on 10-year US Treasuries rose Monday, up to 0.905 and in the green by 0.19%.
