Day: April 27, 2021

Bitcoin Market Dominance Falls As $55k Resistance Pushes Alt-season

by NEWSBTC

The crypto market saw high gains for the second day after the weekend sell-off that caused the market to look like a bloodbath.

Data from TradingView showed that Bitcoin rose above $54,000 in the early trading hours of Tuesday. As of writing, the pioneer cryptocurrency is trading at $55,152, a gain of 4.08% in the last 24 hours. It appears that bulls are aiming to break the $55,000 resistance to allow for a possible rally to $58,000.

Bitcoin Eyes $58k

Organic growth has resumed in the BTC market.  The spot-driven BTC bounce back looks sustainable. 

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In a tweet on April 27, analyst Lex Moskovski noted that futures funding rates are suggesting this week’s BTC price run has been completely organic.

Funding rates are a popular metric for measuring the health of BTC price movements. They essentially show which traders are on the right side of the bet (long or short) — a high funding rate on a platform means longs are “paying” shorts, while low funding rates imply the opposite.

Negative rates are what analysts look for when determining if any upside is likely to endure, or is due in the short term.

Currently, conditions are right — the move up to $55,000 was likely not fueled by speculative trading action, says Moskovski.

“Funding is very low and healthy. This run up in Bitcoin came from spot and looks sustainable.” he wrote.

Related article | Bitcoin Funding Rates Fall Flat For Weeks As Market Takes Pause

Alt Season In Full Swing

Despite Bitcoin promise to rise in a few days, many of the alt coins are witnessing tremendous growth in price.

Lower gas fees following the Ethereum network’s Berlin upgrade along with an increase in institutional buying and decentralized finance activity lifted the price of Ether to a new all-time high at $2,680.

Several altcoins saw their prices reach new record highs alongside Ether on Tuesday.

XRP registered a significant price hike in the past 24-hours of an impressive 27 percent. The coin traded at $1.43 and was inching closer to resistance at $1.5; there are also two strong supports at $1.25 and $1.03 if a trend reversal were to take place.

Aave’s price rose by 5 percent in the past 24-hours and traded at $402 with a 24-hour trading volume of $636 million. The coin is likely to come in contact with a strong resistance of $415 – a level last breached on 18 April.

Dogecoin has now become a top-10 staple in the crypto market. In the past day’s time, DOGE saw a marginal improvement in price and was trading at $0.26. Unlike the remaining coins, DOGE’s price action remained extremely range-bound, trading between support at $0.25 and resistance at $0.30.

Related article | Ethereum Gains Momentum, Here’s Here Chances of a Run To $3K

Polygon (MATIC) continued its strong rally, moving as high as $0.75 before taking what appears to be a short breather. Uniswap (UNI) also saw its token price reach a record high at $40.50 following a 17% rally from the lows on April 26.

The overall cryptocurrency market cap now stands at $2.08 trillion and Bitcoin’s dominance rate is 49.81%.

Featured image from Pixabay, Charts from Tradingview.com and Coin360

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Bulls push Ethereum price higher ahead of Friday’s $930M options expiry

by Cointelegraph

The last couple of weeks have been nothing short of a roller coaster for Ether (ETH), which oscillated between $2,000 and a record-high $2,650. The 20% crash on April 17 caused a $1 billion liquidation on long futures contracts, and it also drastically reduced investors’ appetite for risk.

Ether (ETH) USD price at Coinbase. Source: TradingView

However, as displayed above, the 28% gain over the last couple of days caused the open interest on Ether futures to reach $8.2 billion, which is just 5% below its April 15 record. A similar event took place in the options markets, which have grown by 45% since the March 25 expiry.

The recent price recovery has been attributed to Paypal’s CEO stating that demand for cryptocurrencies has been multiple-fold higher than expected. Moreover, the net value locked in Ethereum smart contracts reached a record-high $54.2 billion, led by Uniswap, Compound, and Maker.

Ethereum network Net Value Locked. Source: DeBank.com

The 154% increase in this metric happened while network fees sustained levels above $8 per transaction, therefore easing speculation of predatory competition. Meanwhile, Binance Smart Chain reached a $17 billion TVL, and the decentralized finance (DeFi) growth seems more than enough to support both.

Open interest soared, but 22% of it is about to mature

While the current $4.2 billion Ether options open interest represents an all-time high, $930 million of these are set to expire on April 30. As usual, Deribit exchange reigns supreme with a 90% market share.

It is worth noting that not every option will trade at expiry, as some of those strikes now sound unreasonable, especially considering there are less than three days left.

Options are divided into two segments, as the call (buy) options allow the buyer to acquire Ether at a fixed price on the expiry date. These are often used on either neutral arbitrage trades or bullish strategies.

Meanwhile, the put (sell) options are the preferred instrument for hedging to gain protection from negative price swings.

To understand how these competing forces are balanced, one should compare the calls and put options size at each expiry price (strike).

April 30 ETH options at Deribit. Source: Laevitas.ch

A weird pattern emerged as bears were caught by surprise, with 91% of the put options open interest at $2,400 or lower. Meanwhile, bulls were overly optimistic, with nearly half of those call options at $2,880 and above.

Bulls have a decent $115 million lead

However, any expiry above $2,240 is highly favorable for the bulls who currently lead with a $115 million open interest. This difference favoring call options would double at $2,880, although this doesn’t seem to justify a 10% hike in Ether price.

As for the bears, this game seems utterly lost as only a miracle 17% drop below $2,240 would be enough to eliminate the call options advantage.

At the moment, there is little reason to believe that the April 30 options expiry will bring any surprise for Ether price. Both Deribit and OKEx settle at 8:00 AM UTC, and the focus of traders is likely to just move on to June options.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.