Market Wrapping: Bitcoin falls to $ 31K as Ether Financing Rates decline

Bitcoin has endured two straight days of sales, bringing the price close to less than $ 31,000. Also, ether funding rates for leveraged jobs are cooling after a very heated few weeks.

  • Bitcoin (BTC) is trading at around $ 31,850 at 21:00 UTC (4 pm ET). 8.9% slipped over the previous 24 hours.
  • Bitcoin 24 Hour Range: $ 31,006- $ 35,656 (CoinDesk 20)
  • BTC slightly above the 10-hour moving averages but well below the 50 hours on the hourly chart, a sideways-to-bearish signal for market technicians.

Bitcoin trading on Bitstamp since January 18.
Source: TradingView

The price of bitcoin is in its second big sales day, with the world’s oldest cryptocurrency starting out Thursday at around 14:30 UTC (9 am ET) at $ 31,006, according to CoinDesk data 20. Bitcoin has gained some since, changing hands at $ 31,850 at press time.

Read more: Bitcoin Slumps to $ 31K on Sell-Off in the US and Europe

Rupert Douglas, head of institutional sales at crypto custody provider Koine, said this week’s bitcoin collapse came after a month when fresh highs were always crossed multiple times. “It’s been a bit of a run,” Douglas told CoinDesk. “I think we’re due back after the recent pump.”

The all-time highest for the price of bitcoin, set on Jan. 8, is $ 41,962, according to CoinDesk data 20. In the few weeks after that record – to Thursday’s minimum – bitcoin fell over 26%.

Bitcoin historical price over the last month.
Source: CoinDesk 20

Katie Stockton, a technical analyst at Fairlead Strategies, continues to see support at $ 25,000 where she sees traders looking to seize some of the asset and push the price back up.

“Yes, bitcoin extends its disadvantage,” said Stockton. “The $ 25,000 level would be a natural level for buyers to show interest.”

Volatility for bitcoin has been increasing. Data from late Wednesday shows that bitcoin’s 30-day volatility tends to rise again. It was at 88.7% on January 20, a level not seen since April 2020 when the coronavirus created uncertainty for all markets in general, including cryptocurrencies.

Bitcoin’s 30-day historical volatility last year.
Source: Shuai Hao / CoinDesk Research

Stockton expects bitcoin gyrations to last for a while. “My short-term overbought / oversold measures support a couple more weeks of handicap volatility, after which we would look to find support.”

News stories are beginning to detail bearish signals in the crypto market, including one on the nominee for Treasury Secretary in the Biden administration, according to Jason Lau, chief operating officer of the OKCoin exchange in San Francisco. “Janet Yellen’s comments about crypto reduction were another negative headline,” Lau told CoinDesk.

Read more: Bitcoin Selling on Bearish Sentiment, Yellen Concerns

Additionally, Wednesday’s bitcoin volumes are shaping up to be the weakest they have been in the past month. The daily volume of the eight exchanges tracked on the CoinDesk 20 was at $ 860 million at press time, a paltry showing compared to last month’s $ 4.3 billion average.

Bitcoin spot volumes on eight major exchanges last month.
(Shuai Hao / CoinDesk Research)
Source: CryptoCompare

Lau OKCoin is seeing a lot of sales in the market, with Asia being particularly bearish, he told CoinDesk. And yet, institutional investors in the US are still grabbing some bitcoin, which is a bright spot to consider.

“Over the past few weeks we have seen strong and steady sales during Asian trading hours, while new North American capital has consistently bought the dips during their trading hours,” said Lau. “Asian traders look to be profiting with price increases, while American investors, mainly institutions, continue to participate in crypto markets and collect jobs.”

Ether exchange exchange funding comes back to earth

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Thursday, trading around $ 1,206 and falling 9.6% in 24 hours at 21:00 UTC (4:00 pm ET).

After some ether exchange rate swaps came in at high levels in January, including BitMEX offering a staggering 0.6% + January 4., the numbers are now converging towards a spot price drop and ‘ r place.

Ether flat swaps are funding in large leverage locations last month.
Source: Skew

The funding rates are for liquidity providers to offer traders leverage to go long or short. So when funding rates were high, it meant that traders paid a premium to go long. It’s much lower now.

Vishal Shah, founder of Alpha5 derivatives exchange, says previously unbelievably high funding rates prove to be an all-time high of $ 1,439 per 1 ETH due to overheating market. “I’ve only had a marginal view, but I’d say the cost of leverage is too high,” Shah told CoinDesk.

Other markets

Digital assets on the CoinDesk 20 are almost all red Thursday. Notable winner at 21:00 UTC (4:00 pm ET):

Read more: Kraken Adds 26 Crypto Pairs to Capture UK Growing Markets, Australia

  • Oil was flat, in the green 0.09%. Barrel price of Central Texas Intermediate crude: $ 52.99.
  • Gold was also flat, in the red 0.06% and at $ 1,870 at press time.
  • The 10-year US Treasury bond yield climbed Thursday to 1.102 and in the green 1.6%.

The CoinDesk 20: The Most Important Assets to Market