The bitcoin market saw spot volumes not witnessed since February and record derivatives action over the weekend. Ether declined, while the meme-y alternative cryptocurrency dogecoin saw double-digit percentage price appreciation.
- Bitcoin (BTC) trading around $56,026 as of 21:00 UTC (4 p.m. ET). Gaining 0.30% over the previous 24 hours.
- Bitcoin’s 24-hour range: $54,680-$57,456 (CoinDesk 20)
- BTC near the 10-hour but below the 50-hour moving average on the hourly chart, a sideways signal for market technicians.
The price of bitcoin suffered a price drop on Monday, dipping to as low as $54,680 before recovering somewhat, to $56,026 as of press time
“The crypto markets witnessed a sudden dip over the weekend, when BTC dropped before recovering about half of that by day end,” noted David Lifchitz, CIO and partner at quant trading firm ExoAlpha.
Bitcoin volumes on major exchanges that encompass the CoinDesk 20 had a banner day Sunday when viewed through the prism of the past three months. Volumes on the CoinDesk 20 eight spot BTC venues was over $8 billion for the first time since Feb. 23, when volumes surpassed $12 billion. Volumes were much lower Monday, at below $4 billion as of press time.
The majority of volume Sunday was related to derivatives, noted Jason Lau, chief operating officer of San Francisco-based exchange OKCoin.
Liquidations, the crypto equivalent of a margin call, approached the $10 billion mark Sunday across all digital assets according to data aggregator Bybt. The leveraged wipeouts are a record level that surpasses a previous record set in February.
“As usual, the primary reason was a combination of over-leveraged derivative traders,” Lau told CoinDesk.
Traders are obviously trying to peer into the future to see where BTC will head this week after the dump. It may take a recovery to over $60,000 for the market to expand due to increased retail interest again while whales will scoop up more of the asset if it heads back towards $50,000, according to ExoAlpha’s Lifchitz.
“Bitcoin is stuck in the $50,000-$60,000 twilight zone,” said Lifchitz. “Above $60,000 it’s the retail FOMO, or Fear Of Missing Out, frenzy. Below $50,000 lay the institutional dip buyers.”
According to CoinDesk 20 data, bitcoin has closed at over $60,000 only seven days, all of them in March and April. It has not closed below $50,000 since March 6.
The Coinbase direct listing last week might add some padding to the market as newer investors find increased interest in crypto, said Misha Alefirenko, co-founder of crypto market maker Velvetformula.
“Retail investors are finally in the game with all the buzz around the Coinbase listing,” Alefirenko said.