Market Wrap: Bitcoin Flat at $11.2K; DeFi Has Highest Volume Month Ever – CoinDesk

Bitcoin trading is weak Tuesday while volumes on DeFi are as high as they have ever been.

After wild Sunday action that saw the price of the world’s oldest cryptocurrency fall as low as $10,050 on spot exchanges like Coinbase, bitcoin is trading relatively flat, at around $11,200 Tuesday. “The asset is trading in a narrow range of $11,080 to $11,220,” said Constantine Kogan, a partner at crypto fund of funds BitBull Capital. “To continue last week’s rally, bitcoin needs to overcome the resistance level, which is in the $11,300- $11,400 region,” he added. 

Katie Stockton, analyst for Fairlead Strategies, says the bitcoin market is weaker after traders scurried in late July to buy, leading to an “overbought” situation for the world’s oldest cryptocurrency. “We view sideways price action as constructive,” she said. “Bitcoin has gained approximately 29% since July’s low, and is now due for consolidation.”

Money printing from the Federal Reserve is one reason why the case for buying bitcoin sustains, says BitBull’s Kogan. “The sharp rise in bitcoin is associated with the weakening of several world currencies – the dollar and the Chinese yuan,” he said. According to the Fed, the M1 money supply, which constitutes cash and cash equivalents, has increased from $4 trillion at the start of February to $5.3 trillion at the end of July, a 33% increase. 

Andrew Tu, an executive at quantitative trading firm Efficient Frontier, is bullish on a higher bitcoin price. “We are now at higher lows and now have a genuinely tested support line at $11,000,” Tu said. “Bitcoin seems to be trending upwards now.” 

Ether (ETH), the second-largest cryptocurrency by market capitalization,  was down Tuesday, trading around $387 after slipping 1.8% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

July was the best trading volume month ever for Ethereum-powered decentralized exchanges, or DEXs. According to data aggregator Dune Analytics, DEX volumes approached $4.3 billion this past month, four times the volume than in June and a twelvefold increase since July 2019. Leading the way was Uniswap’s DEX, followed by stablecoin swapping platform Curve.

“Uniswap has really grown tremendously over the course of the last year,” said Efficient Frontier’s Tu. He also noted technological improvements and incentives that increase liquidity have helped the growth of DEXs. “This is due to the automated market making, or AMM, innovations seen in the space, as well as due to liquidity mining.”

Digital assets on the CoinDesk 20 are mixed Tuesday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

Notable losers as of 20:00 UTC (4:00 p.m. ET):