Market Wrap: Bitcoin Hovers at $19K to Remain Within Current Range
Bitcoin and ether were flat, decentralized finance (DeFi) tokens were up amid moderate trading volume as investors continued their fretful watch of wider economic indicators.
The DeFi token rally was a rare exception in a market that has been moving sideways for weeks, said Riyad Carey, a research analyst at crypto data firm Kaiko.
The CoinDesk Market Index (CMI), a broad-based market index that measures the performance of a basket of cryptocurrencies, was relatively flat, falling 0.80%.
- Bitcoin (BTC) was recently trading at about $19,200, roughly where it stood 24 hours ago and toward the bottom of the $19,000 to $21,000 range the largest cryptocurrency by market capitalization has occupied for more than a month. Bitcoin continued to trail its 20-day moving average, clear evidence of the bear market’s resiliency.
- Ether’s (ETH) was recently changing hands just below $1,300, also about the same from Tuesday, and near its bottom support for much of the past month. Ether has also continued its recent trend of trading below its 20-day average.
- The top altcoin gainers recently were AAVE and MATIC, which both climbed more than 3%. Uniswap’s UNI token rose 3.5% at one point and was up 9.5% over the past seven days. On Oct. 13, Uniswap, the decentralized exchange behind the token, announced that it had raised $165 million in a Series B funding round led by Polychain Capital.
Traditional financial markets declined on Wednesday, with the tech-heavy Nasdaq off 1.1% and the Dow Jones Industrial Average (DJIA) and S&P 500 each falling by a few fractions of a percentage point.
In major macroeconomic data, U.S. housing starts plunged 8.1% to 1.439 million in September, falling slightly short of the consensus estimate but reflecting a sagging of the once-torrid housing market. However, September housing permits, an indicator of future construction, rose by 1.4% over August.
Global inflation continued to tick higher, with Great Britain (10.1%) and Canada (6.9%) each reporting higher increases in prices than expected. Both countries recently increased their key interest rates by 0.50% and 0.75%, respectively. Hotter-than-expected inflation increased the likelihood that both countries would raise interest rates aggressively, similar to the U.S., where the Federal Reserve’s Federal Open Markets Committee is expected to approve a fourth consecutive 75 basis point rate hike in November.
In commodities, Brent crude oil, a measure of energy markets, was recently trading slightly down but still hovering well over $90 per barrel, up more than 15% from the start of the year. Safe-haven gold declined 1.4%.
● CoinDesk Market Index (CMI): 938.16 −0.9%
● Bitcoin (BTC): $19,191 −0.7%
● Ether (ETH): $1,294 −1.4%
● S&P 500 daily close: 3,695.16 −0.7%
● Gold: $1,634 per troy ounce −0.9%
● Ten-year Treasury yield daily close: 4.13% +0.1
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.
Investors’ Time Horizons Will Determine Their Bitcoin Positions
On a technical basis, the decision whether to go long bitcoin at current levels will depend on the investor’s time horizon.
For investors with short-term trading horizons, BTC appears to be offering few opportunities. The average true range (ATR) for BTC has declined by close to 74% year to date, taking with it the volatility needed for short-term traders to generate additional alpha.
The opportunity set for long-term holders appears stronger as support for BTC’s price is establishing itself near current levels. The lack of volatility should prove beneficial in this regard because investors with the luxury of waiting can accumulate BTC at a more favorable price.
The most recent Commitment of Traders report, released each Tuesday by the Commodity Futures Trading Commission, shows that reportable positions for asset managers are now 80% long and 20% short bitcoin futures.
BTC’s Relative Strength Index (RSI), a metric commonly used as a proxy for momentum, is in neutral territory with a reading of 45.7. Traditionally, RSI readings below 30 imply that an asset is “oversold,” and readings over 70 imply that an asset is “overbought.”
- Hotly Anticipated Layer 1 Blockchain Aptos Token Plunges in Trading Debut: FTX, Coinbase and Binance were among the first exchanges to list the buzzy new layer 1 token. Aptos's APT token was listed in the $9 range – down over 30% – on CoinGecko within its first hour of trading. Read more here.
- With Bitcoin and Stocks Flat, Rally in DeFi Tokens Gets Notice: While top crypto assets like bitcoin and ether and traditional markets stayed flat on Wednesday, tokens from decentralized finance (DeFi) took the spotlight. The outperformance of DeFi tokens on Wednesday was punctuated by gains from those associated with the Uniswap, Aave and Maker protocols. Read more here.
- Terra Developers Unveil 4-Year Plan to Revive LUNA Ecosystem: Incentivizing developers and increasing user activity with LUNA tokens are key parts of the proposal. Read more here.
- Listen 🎧: Today’s "CoinDesk Markets Daily" podcast discusses the latest market movements and a look at the confusing and strange psychology of markets.
- Bitcoin Futures ‘Backwardation’ Could Signal Bearish Mood: This condition in the bitcoin futures market hasn't happened since May 2019, according to Luno.
- Binance Becomes Second-Largest Voting Entity on Uniswap DAO: Uniswap’s founder has accused Binance of using customer funds to amass governance votes.
- Persistence’s Liquid Staking Protocol pSTAKE Teams Up With Anchorage Digital: Liquid staking has become more popular with institutions, particularly after the Ethereum network moved to proof-of-stake.
- US Alleges 5 Russian Nationals Used Crypto as Part of Sanctions Evasion, Smuggling Scheme: Defendants allegedly laundered "millions of dollars" of an unspecified crypto.
- South Africa Classifies Crypto Assets as Financial Products: The move brings digital assets more under the purview of the country’s regulators.
- EU Antitrust Officials Are Worried About Competition in the Metaverse: The European Commission is concerned that a company like Facebook parent Meta Platforms could dominate the market, hurting consumers.
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Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.