Market wrap: China breaks crypto as Bitcoin drops to $ 36,000, ETH loses $ 300 in two hours

It was a low volume Friday to cap a week of rising and falling for cryptocurrencies. The news from China caused traders to press the sell button for two hours before the selling leveled off.

  • Bitcoin (BTC) is trading around $ 36,224 at 9:00 p.m. UTC (4:00 p.m. ET). 9.7% loss in the last 24 hours.
  • 24-hour range of Bitcoin: $ 36,224 – $ 42,163 (CoinDesk 20)
  • Ether (ETH) trading around $ 2363 at 9:00 p.m. UTC (4:00 p.m. ET). In the red 15.5% in the previous 24 hours.
  • 24 Hour Ether Range: $ 2,363 – $ 2,929 (CoinDesk 20)

Bitcoin slips as volume evaporates

Bitcoin hourly price chart on Bitstamp since May 18.
Source: TradingView

Bitcoin, the world’s largest cryptocurrency by market cap, was down 9.7% as of press time on Friday. BTC was below the 10-hour and 50-day moving average, a bearish signal to market technicians.

According to point data from Bitstamp, BTC is heading for its second consecutive week down 20% or more, on track for a 37% drop over the two-week period, on par with the market’s bloodbath of March 2020.

The main catalyst for Friday’s decline was a statement from a Chinese State Council on BTC: “We should crack down on bitcoin mining and trading activities and prevent individual risks from being passed on to the market. ‘whole of society.’

In two hours, bitcoin went from $ 41,454 at around 2:15 p.m. UTC (10:15 a.m.ET) to $ 36,880, a drop of 11%, based on data from CoinDesk 20. Bitcoin is still down, to $ 36,224 at the time of the publication.

“I expect the BTC / USD to be around $ 38,000 for a while,” said George Clayton, managing partner at investment firm Cryptanalysis Capital.

After a day of record 2021 bitcoin volume on Wednesday, Friday is shaping up to be a drop as the weekend approaches. At around $ 4 billion on Friday, the volume was down 75% from the volume of $ 16 billion on Wednesday, based on data from CoinDesk Research on eight major spot bitcoin exchanges.

Anticipate consolidation

Bitcoin volumes on major sites last month.
Source: CryptoCompare

Neil Van Huis, director of institutional sales and trading at Blockfills, the crypto market maker, says “consolidation,” a period of low volume and subsequent price discovery due to lack of liquidity, could be a market factor this weekend.

“I foresee some consolidation from where the markets may have already erupted,” Van Huis said. “I think the market seems to be digesting the decline very fairly and we’ll soon know what it wants to do next.”

Read more: Institutional bitcoin buying increased around Wednesday’s crash

Bitcoin options traders don’t know what to do with $ 50K

Bitcoin options open interest by strike.
Source: Distort

In the Bitcoin derivatives market, over 16,700 BTC is centered on a strike price of $ 50,000, the highest open interest. However, the split between puts and calls is almost even. A put is a right but not an obligation to sell an asset while a call is the right but not an obligation to buy an asset – both within a specific period of time, known as expiration.

This is an intriguing development as bitcoin hasn’t hit the $ 50,000 price point for over a week and maybe it’s a sign that smart options traders are taking both sides of the trade to this level.

“Open interest does not indicate directionality,” noted Vishal Shah, founder of crypto derivatives exchange Alpha5.

Increase in ETH volatility

30 Day Volatility for Top Ten CoinDesk 20 Assets.
Source: CoinDesk research

Since early April, the 30-day volatility for 10 branded crypto assets on CoinDesk 20 has all increased, including bitcoin. However, it is Classical Ethereum (ETC) and Ether that are found in the stratosphere of wild price swings. Both assets have more than 30 days volatility at 250% as of Thursday’s data close.

“The part that stands out the most is that volatility has exploded recently, with many assets over 200% realized, which is huge,” said Rich Rosenblum, president of crypto market maker GSR. “Then, at the same time, BTC volatility is high compared to its lull a few weeks ago, but certainly eased compared to the rest, remaining below 100%.”

Deribit’s “DVOL” index for ether last month.
Source: Genesis volatility

Greg Magadini, CEO of Genesis Volatility, noted that ETH’s “DVOL” metric, which is a volatility measure similar to the VIX of traditional markets and followed by the Deribit options exchange, is at 180. Its record high was Thursday, at 190. He says realized volatility, which is derived from analysis of historical returns, is now built into the market.

“Although we have come down from the peak of volatility achieved in recent days, to over 300%, volatility is known to regroup,” said Magadini. “The options markets value over 100% implied volatility for all expirations and around 150% for near-dated options.”

Aether Dominance Dump

Hourly Ether price chart on Bitstamp since May 18.
Source: TradingView

Ether, the second largest cryptocurrency by market cap, was trading around $ 2,363 at 9:00 p.m. UTC (4:00 p.m. ET), sliding 15.5% over the previous 24 hours. The asset is below the 10-hour moving average as well as the 50-day average, a bearish signal for market technicians.

Ether fell from $ 2,740 around 2:15 p.m. UTC (10:15 a.m. ET) to $ 2,426 at 4:15 p.m. UTC (12:15 p.m. ET), a decrease of $ 314 based on data from CoinDesk 20 ETH is still slipping, to $ 2,363 at time of release. publication.

Nick Mancini, research analyst at crypto sentiment analysis platform Trade the Chain, says major blockchain assets such as bitcoin and ether are still viewed positively, despite recent price declines and downturns. jumps in volatility.

“Looking ahead, long-term sentiment scores for most cryptocurrencies, especially bitcoin and ether, are still high, in the ’70s, despite all the recent turmoil,” Mancini said. “Which means the bullish thesis remains intact.”

The bullish thesis may hold up overall, but traders have clearly lost some interest in Ether versus other cryptocurrencies. The dominance of Ether, its part of the largest cryptocurrency market, has started to decline. After peaking at 20.61% in 2021 on May 15, ETH’s dominance has started to weaken, below 18% share and down 2% in the past 24 hours on time. the press.

The dominance of the Ether market in 2021 so far.
Source: TradingView

Read more: US seeks information on $ 1.4 million EtherDelta hack in 2017

Other markets

Digital assets on CoinDesk 20 are all on Red Friday. Notable losers at 9 p.m. UTC (4 p.m. ET):

Read more: Gensler says SEC should be ‘ready to submit cases’ involving crypto

  • Oil rose 3.1%. Price per barrel of West Texas Intermediate crude: $ 63.85.
  • Gold was in the green 0.13% and at $ 1,879 at time of publication.
  • The money is down, down 0.80% and changing hands to $ 27.53.
  • The yield on 10-year US Treasuries fell to 1.622 on Friday and fell into the red 0.42%.

CoinDesk 20: the assets that matter most to the market


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