Market Wrap: Bitcoin Fails Test of $40K While Ether Loses Steam Near $2.9K

Leveraged traders have failed in the marketplace to push Bitcoin over the $ 40,000 hump. Meanwhile, Ether continues to steal trading volume from BTC during a steady price spike towards $ 2,900.

  • Bitcoin (BTC) was trading for $ 38,532 at 9:00 p.m. UTC (4:00 p.m. ET). Gain of 1.7% in the last 24 hours.
  • Bitcoin 24-hour range: $ 37,311 to $ 39,402 (CoinDesk 20)
  • ether (ETH) was trading at around $ 2,789 at 9:00 p.m. UTC (4:00 p.m. ET). Im green 1.1% in the last 24 hours.
  • Ether’s 24-hour range: $ 2,673 $ 2,882 (CoinDesk 20)

Bitcoin swaps remain stable

Bitcoin’s hourly chart on Bitstamp since May 31st.
Source: TradingView

Bitcoin, the world’s largest cryptocurrency by market capitalization, rose 1.7% at press time on Thursday. It was below the 10-hour moving average but above the 50-hour average, a flat signal for market technicians.

The price of BTC jumped from $ 37,311 at 5:15 PM UTC (10:15 p.m. ET Wednesday) to $ 39,402 at 1:30 PM UTC (6:30 a.m. ET) Thursday, a 5.6% increase based on CoinDesk 20 dates. Bitcoin then settled at $ 38,532 at press time.

“We assume that spot Bitcoin will trade in a range with a slight bullish bias in the short term as furious leveraged longs have been washed out,” noted the quant trading company QCP Capital in its latest investor announcement. “We’ve seen significant purchases and sales at $ 30,000 and $ 40,000, respectively.”

According to the data aggregator Skew, the costs for perpetual swaps, which provide liquidity for leveraged traders, have been consistently close to zero (0%) since May 26th.

Bitcoin has swapped funding in various locations over the past three months.
Source: Crookedness

It is a sign that many traders are not building leverage to go one way or the other as funding rates will pop or fall due to bull or bear bias.

“BTC was trying to break through $ 40,000 to break out of the $ 30,000 to $ 40,000 range we were stuck in after the mid-May crash,” said Elie Le Rest, partner at quantitative trading company ExoAlpha. “The $ 40,000 line seems to be broken as market participants regain confidence after the big crash two weeks ago.”

On May 23, Bitcoin hit a three-month low of $ 34,259, while Ether fell to $ 2,080 that day.

Continue reading: Bitcoin tries to break out in price while analysts see limited upside potential

BTC volatility rises, ETH takes a breather

Previous 30-day volatility of Bitcoin and Ether in 2021.
Source: CoinDesk research

Thirty-day volatilities in BTC (46%) and ETH (68%) have spiked again after falling to the 2021 lows on April 15 and appearing to continue to rise, at 92% on Wednesday’s closing dates.

“We are still cautious about a potential BTC downtrend as the volatility deviation remains high and puts are significantly more expensive than calls,” QCP Capital stated on Thursday. “We assume downtrends are a decent sale.”

The steady rise in volatility comes after the huge price dumping for crypto on May 23, noted David Russell, VP of Market Intelligence at brokerage TradeStation Group.

“Obviously, after the sell-off at the end of May, we expect higher volatility,” said Russell. “It’s also normal for prices to pause and consolidate after a big move.”

Ether volume again larger than BTC

The hourly price chart of Ether on Bitstamp since May 31st.
Source: TradingView

The second largest cryptocurrency by market cap, Ether, traded at around $ 2,789 at 9:00 PM UTC (4:00 PM ET), up 1.1% in the past 24 hours. The asset is below the 10-hour moving average but above the 50-hour average, a sideways signal for market technicians.

Ether gained from $ 2,673 at 02:00 UTC (7:00 PM ET Wednesday) to $ 2,882 by 1:15 PM UTC (6:15 PM ET) Thursday, a 7.8% increase based on CoinDesk 20 data. ETH has lost some of its momentum since then and is at $ 2,789 at the time of going to press.

For the past five days, the daily trading volume of Ether on major spot exchanges tracked by CoinDesk Research has been higher than that of Bitcoin. It is a constancy that goes back a month so far, as the trading volume at ETH was higher on 14 of the last 30 days than at BTC.

Bitcoin and Ether trading volume last month.
Source: Coin Gecko

George Clayton, managing partner of investment firm Cryptanalysis Capital, says newer capital coming into the room could test Ether over Bitcoin’s prospects for the future, which could lead to higher volumes.

“Perhaps the ETH will see a somewhat stronger institutional flow,” said Clayton. “For institutions that have successfully integrated crypto into their compliance frameworks and have already invested in BTC, ETH is the next step.”

Continue reading: The crypto credit rating company Credmark relies on the modeling of DeFi protocol risks

Costs for using Ethereum fall

Gas prices, based on median amounts paid, on Ethereum in the last three months.
Source: Dune analysis

The costs for “gas”, the fees paid in ether for using the Ethereum network, are close to a three-month low. After rising to a staggering median or mid-price of 305 gwei for interacting with the network on May 11th, that price has dropped to 24 gwei by May 30th. Gwei is defined as one billionth of an ETH, so 1 gwei equals 0.000000001.

The drop in fees is a good sign that, despite increased usage of the Ethereum network, the cost is much lower than it has been for a long time. This is especially true as the price of Ether is slowly trending up, which has historically led to a spike in fees, noted TradeStation’s Russell.

“Ether is already close to its level from early May,” Russell told CoinDesk.

Other markets

Digital assets on the CoinDesk 20 are mostly higher Thursday. Notable Winners as of 9:00 PM UTC (4:00 PM ET):

  • Gold was down 1.9% to trade at $ 1,871 at press time.

Continue reading: Online broker eToro added 3.1 million new customers in the first quarter: report

  • The 10-year US Treasury yield rose to 1.623 on Thursday, up 2.2%.

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