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Market Wrap: BTC Not Quite Ready to Stay Above $25K

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Price Action

BTC briefly touches $25,000 in overnight trading

Bitcoin (BTC) briefly broke through the psychologically significant $25,000 mark in overnight trading, before paring those gains during U.S. trading hours.

The largest cryptocurrency by market capitalization reached as high as $25,212 early in the U.S. trading day before retreating to its current level above $24,000.

This article originally appeared in Market Wrap, CoinDesk’s daily newsletter diving into what happened in today’s crypto markets. Subscribe to get it in your inbox every day.

Ether’s (ETH) price declined 4% on Monday, but it remained above the $1,900 level it has maintained since late last week. In overnight activity, ETH briefly surpassed $2,000.

Both BTC and ETH traded on average volume, using the 20-day exponential moving averages (EMA) as a barometer for normality.

Traditional markets started the week relatively flat, with the S&P 500, Dow Jones Industrial Average (DJIA) and tech-heavy Nasdaq composite up 0.1%, 0.2% and 0.3% respectively.

Commodities were in decline, with the prices of crude oil and natural gas down 4% and 1.3%, respectively. The price of gold, a traditional safe haven asset, contracted 1.09%, while copper’s price sank 1.7%.

Latest Prices

Bitcoin (BTC): $23,997 −1.2%

Ether (ETH): $1,893 −2.2%

S&P 500 daily close: 4,297.14 +0.4%

Gold: $1,794 per troy ounce −0.2%

Ten-year Treasury yield daily close: 2.79% −0.06

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.

Technical Take

BTC’s hourly chart highlights the attempt to surpass $25,000

The hourly chart below illustrates BTC’s brief move above $25,000 before it retreated.

However, that move occurred within a candle that finished the hour in negative territory, indicating that bitcoin isn’t ready to hold $25,000 support. A trading candle illustrates an asset’s high, low, opening and closing price within a chart. Bitcoin’s price rose 2.7% before the start of U.S. trading before declining 3.5%.

BTC appeared to be settling into a range between $24,000 and $25,000, with trading volume recently declining. A lack of trading volume for an asset can imply lesser trader conviction about an asset’s potential gains.

CoinDesk - Unknown

Bitcoin/U.S dollar hourly chart (Glenn Williams Jr./TradingView)

Bollinger bands on BTC’s daily chart indicate a reversion to mean

BTC’s Bollinger bands indicate that prices may retreat to $23,500. For context, Bollinger bands measure the moving average for an asset and calculate values that are two standard deviations above and below the aforementioned moving average.

Traders often use Bollinger bands to determine whether prices have drifted too far from an asset’s short-term average. The question that Bollinger bands attempt to answer is whether an asset’s price is excessively high or low compared with its recent activity.

Traditionally, when prices breach the upper range of the Bollinger band, investors see them as being too high. Conversely, when an asset’s price breaches the lower end of its bollinger band, investors view them as too low.

Because the bands are based on standard deviation of price moves, they contract when volatility decreases and expand when volatility increases.

In BTC’s daily chart, prices on Monday have been flirting with the upper range of its bands. On several occasions BTC’s price has reverted to the mean/middle band following instances where it touched the upper and/or lower bands.

Investors can look at what happened on July 30, July 20 and July 8 as examples of this reversion. Should BTC prices behave as they did during those past occasions, BTC’s price would revert to $23,500.

CoinDesk - Unknown

Bollinger bands on BTC's daily chart (Glenn Williams Jr./TradingView)

Altcoin roundup

  • Acala’s Stablecoin Falls 99% After Hackers Issue 1.3B Tokens: Polkadot-based decentralized finance (DeFi) platform Acala’s native stablecoin, aUSD, depegged on Sunday, plummeting 99%. A bug in the protocol’s newly deployed iBTC-aUSD liquidity pool left the door wide open for hackers to exploit. Read more here.
  • Price Discount on ‘stETH’ Reflects Some Doubt on Smooth Ethereum Merge: The current price of stETH implies a close to 94% chance of the Merge succeeding without major hiccups or delays, according to Enigma Securities. Read more here.
  • Shiba Inu, Dogecoin Jump as Risk-On Behavior Returns to Crypto Markets: Meme tokens shiba inu (SHIB) and dogecoin (DOGE) gained over 15% in the past 24 hours. Futures tracking the two tokens saw over $25 million in liquidations in the past 24 hours. Read more here.

Relevant insight

  • Listen 🎧: Today’s “CoinDesk Markets Daily” podcast discusses the latest market movements and Ethereum’s decreasing gas fees.
  • Crypto Custody Firm BitGo to Sue Galaxy Digital for Abandoning $1.2B Merger Agreement: BitGo said Galaxy Digital owes it a $100 million break-up fee.
  • Blockchain Services Firm Eqonex Closes Crypto Exchange, Citing Volatility and Dwindling Volume: The Nasdaq-listed company will now focus on its asset-management and custody businesses.
  • Miner Chandler Guo Repeats Support for Ethereum Fork Post-Merge: Guo told CoinDesk TV he wants to create a new proof-of-work blockchain to help miners.
  • Monero’s Privacy-Focused Crypto Protocol Upgrade Is Now Live: The change to the protocol, a collaborative effort involving 71 developers, has been successfully implemented.
  • Crypto Exchange Coinify Obtains Regulatory Approval to Operate in Italy: The now-bankrupt crypto lender Voyager Digital acquired the exchange for $84 million in stocks and cash last August.
  • Crypto Exchange Binance Receives Preliminary Approval to Operate in Kazakhstan: The crypto exchange has strengthened its compliance team and enhanced efforts to win operating licenses this year after drawing the ire of regulators.
  • Digital Bank Revolut Gets Approval to Offer Crypto Services Throughout Europe: The authorization will let the firm, which was valued at $33 billion in a recent funding round, offer crypto services to its 17 million customers in the European Economic Area.
  • Gate.io’s Hippo Financial Services Obtains Hong Kong Crypto Custody License: The parent company is expanding globally.
  • Zipmex Crypto Exchange Gets Over 3 Months of Creditor Protection in Singapore, Bloomberg News Reports: The city-state’s High Court granted Zipmex protection until Dec. 2 to give the exchange time to come up with a funding plan after filing for bankruptcy in July.

Other markets

Biggest Gainers

There are no gainers in CoinDesk 20 today.

Biggest Losers

Asset Ticker Returns DACS Sector
Shiba Inu SHIB −6.2% Currency
Polygon MATIC −4.4% Smart Contract Platform
Dogecoin DOGE −4.3% Currency

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 20 is a ranking of the largest digital assets by volume on trusted exchanges.

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Source coindesk.com

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