Market Wrap: Bitcoin Dumps to $21.9K; ETH 2.0 Affected Ether Locked in DeFi

After Bitcoin's record volume last week for 2020, the price fell to a lower volume. The November drop in Ether assets locked in DeFi is at least partially due to the ambitious 2.0 upgrade to the Ethereum network.
Bitcoin (BTC) starts trading at $ 22,843 as of 9:00 PM UTC (4:00 PM ET). 5.3% less than in the last 24 hours.
Bitcoin's 24-hour range: $ 21,960 to $ 24,081 (CoinDesk 20)
BTC near its 10-hour moving average and below the 50-hour average on the hourly chart, a sideways bearish signal for market technicians.
The price of Bitcoin has ridden up and down a roller coaster in the past 24 hours. After a steady surge of more than $ 23,800 in the early hours of the morning, the world's oldest cryptocurrency fell to $ 21,960, according to CoinDesk 20 data. The price rebounded somewhat to $ 22,843 at press time.
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Sub-par volume resulted in a market thinner than usual on Monday as many traders likely stayed on the sidelines with the upcoming holidays and new year.
Related: Ripple CEO Warns SEC May Sue Company About XRP Sales
“Trading activity is subdued. That doesn't motivate anyone to trade in Christmas week, ”said Misha Alefirenko, co-founder of crypto market maker VelvetFormula.
After the combined volume record of $ 4.7 billion on December 17 on major exchanges Bitfinex, Bitflyer, Bitstamp, Coinbase, Gemini, ItBit, Kraken and Poloniex, that figure was $ 2.5 billion at the time of going to press much lower on Monday.
Even so, big buyers in the over-the-counter market have helped keep Bitcoin well above the $ 20,000 level, which was first exceeded on December 16.
Read more: MicroStrategy Saves Another $ 650M on Latest Bitcoin Investment
See also: Author Ben Mezrich on the capture of the Winklevii and plans for a "Bitcoin Billionaires" movie
"Real demand from largely price insensitive institutional buying has driven us to this level, and the resulting fireworks we saw during the break came from the leveraged side as roughly half of the market's outstanding leveraged short positions liquidated "Quant trading company QCP wrote in an investor notice Monday.
The BitMEX derivatives hub saw sales liquidations totaling over USD 44 million, the crypto equivalent of a margin call, which put the bitcoin market under some pressure to go down. Sell ​​liquidations are triggered when leveraged long positions lose a significant portion of the money the buyer booked to place the trade.
"The $ 20,000 spot level ... is now our solid bull / bear line, with $ 16,000 as strong support," QCP Capital said in its investor announcement. "We're going to make it easier to sell puts here as this week brings our very well-marked Christmas schedule, which is now officially the biggest OI that has ever existed."
Open Interest (OI) will be loaded into the Bitcoin options market at the end of December 25, according to the aggregator Skew.
The overhang of the option expiration and the declining activity on the spot market could be the greatest dynamic that can be observed for the market in the coming weeks.
Read More: Shades of Gray Stop the Inflow of Bitcoin Trust
“We might consider further consolidation from here, given the weak seasonality in the first quarter and the risks associated with the new administration to [US]. The inauguration of President-elect Joe] Biden in mid-January, ”QCP added.
ETH is included in DeFi and will climb through from November
The second largest cryptocurrency by market cap, Ether (ETH), fell on Monday, trading at $ 609 and sliding 7% in a 24-hour period at 9:00 p.m. UTC (4:00 p.m. ET).
Read more: Uniswap is the number one gas eater at Ethereum
The amount of ether “locked” in decentralized finance, or DeFi, for “yield” or a yield in exchange for providing liquidity, peaked at 9.4 million ETH on October 20th. In November, the amount of ether locked down fell to as low as 6.7 million before recovering in December at over 7.2 million ETH at press time.
Cooper Turley, editor of the DeFi Rate newsletter, told CoinDesk that Ethereum's 2.0 upgrade dynamic, which includes staking on the network, plays a role in the amount of ether locked, dipping, and then recovery. "People unlocked ETH to wager over [Eth 2.0] and trade on the last try," said Turley. "Now that things have calmed down a bit, most of those who weren't involved in [Eth 2.0] are paying back to DeFi."
Other markets
Digital assets on CoinDesk 20 are mostly red on Monday. One notable winner as of 9:00 PM UTC (4:00 PM ET):
Orchid (OXT) + 14.7%
Notable Losers:
Bitcoin Cash (BCH) - 12.7%
Litecoin (LTC) - 12.3%
xrp (XRP) - 11.1%
Shares:
The Asian Nikkei 225 closed 0.18% as a volatile Monday session dragged the index down on concerns over rising Japanese coronavirus cases.
The FTSE 100 in Europe ended the day down 1.7% as the UK identified a new strain of coronavirus over the weekend affecting the economic outlook for investors.
The US S&P 500 fell 0.40% as the UK's new strain of coronavirus and new lockdowns drove investors to sell and dragged the index down.
Raw materials:
Oil was down 2.6%. Price per barrel of West Texas Intermediate Crude: $ 47.78.
Gold was down 0.26% and was trading at $ 1,876 at press time.
Treasury:
The US 10-year Treasury yield fell to 0.936 on Monday and was in the red by 0.70%.
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Market Wrap: Bitcoin Falls To $ 21.9,000; Affected ETH 2.0 ethers blocked in DeFi
Market Wrap: Bitcoin Falls To $ 21.9,000; Affected ETH 2.0 ethers blocked in DeFi
In this article
BCH-USD
-0.47%
ETH-USD
+ 0.95%
ETHUSD = X.
+ 0.41%
GAS-USD
+ 3.08%
LTC-USD
+ 1.38%
LTCUSD = X.
+ 2.01%
BTC-USD
+ 1.35%
BTCUSD = X.
+ 1.64%
XRP-USD
-0.57%
BTC = X.
-1.62%

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