Market Wrap: Bitcoin Slips to $11.2K; Uniswap Flows Dominate Ether

Bitcoin is trending downward while ether transaction activity is showing Uniswap’s influence on the market.

  • Bitcoin (BTC) trading around $11,359 as of 20:00 UTC (4 p.m. ET). Slipping 0.38% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $11,286-$11,555
  • BTC below its 10-day and 50-day moving averages, a bearish signal for market technicians.

btcoct14

Bitcoin trading on Bitstamp since Oct. 12.
Source: TradingView

Bitcoin’s price dipped Wednesday after a move up to as high as $11,555 on spot exchanges like Bitstamp lost momentum. The world’s largest cryptocurrency by market capitalization then slipped to as low as $11,286 and is at $11,359 as of press time. 

Read More: Bitcoin Steady Above $11,400 as Hashrate Reaches New High

On Aug. 18, bitcoin traded at its 2020 high (so far) of $12,475 on spot exchanges such as Bitstamp. Many investors were hoping bitcoin’s uptrend since Oct. 8 would break above that level. 

However, the market has predictably pulled back, at least according to David Lifchitz, chief investment officer of quant trading firm ExoAlpha.

“The road to over $12,000 is not a straight line,” said Lifchitz. “$11,500 was a first target reached, but also the first major roadblock with a heavy congestion zone ahead, between $11,500 and $12,000, the range in which bitcoin has been trading for the full month of August.”

btcsinceaugstamp

Spot bitcoin trading on Bitstamp since August.
Source: TradingView

“A small pullback after is normal and healthy in order to reload before the next reach toward $12,000,” Lifchitz added. 

Investors expect more volume in the market might help push prices higher. Yet, spot volumes have decreased since late July and into August, when USD/BTC trading activity sometimes could reach as high as $1 billion on a single day.

threemonthvolume

Bitcoin volumes on major venues the past month.
Source: CoinDesk Research

“Crypto exchange and derivative exchange platforms have seen a month-over-month decline of over 30% from numbers seen as recently as June,” said Zachary Friedman, chief operating officer for trading firm Global Digital Assets. “Generally speaking, the industry is still at a place where retail traders dictate most of the volume. These traders have been seen opting more for a longer term HODL strategy, which has caused a lull.” 

Read More: Fidelity Report Says Bitcoin’s Market Cap is ‘Drop in the Bucket’ of Potential

One metric to keep an eye on is implied volatility, which has been trending lower. “Implied volatility is the expected volatility of bitcoin going forward, which tends to give some insight on how much bitcoin could swing, up or down,” noted ExoAlpha’s Lifchitz.

btcatmvolthreemos

Bitcoin options one-month implied volatility the past six months.
Source: Skew

This means traders have more certainty of price direction – at least for the time being. “Today, bitcoin options one-month implied volatility is around 50%, which is in line with a historically quiet market, meaning that there is, as of now, no drastically bullish or bearish sentiment out there regarding expected bitcoin short-term moves,” said Lifchitz.

Uniswap dominates the ether market

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Wednesday trading around $375 and slipping 0.68% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Ethereum’s Vitalik Buterin Calls on Power Users to Move to Layer 2 Scaling

The decentralized exchange, or DEX, Uniswap is dominating the ether market when looking at asset flows. Over the past month, over 4.2 million ether changed hands via Uniswap, tops for the network for one entity, according to data aggregator Flipside Crypto.

etherflows

Ether active supply changing hands the past month.
Source: Flipside Crypto

This activity is a display of the influence Uniswap has on the market. However, Brian Mosoff, chief executive of investment firm Ether Capital, isn’t too concerned about the DEX having so much influence on ether’s market. 

“Uniswap is completely transparent when it comes to trading volumes and metrics,” Mosoff said. “Compare this to alternatives in the cryptocurrency space in centralized exchanges – you need to trust the output of a volume feed that can be controlled by a single person.”

Other markets

Digital assets on the CoinDesk 20 are mostly in the red Wednesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

Notable losers as of 20:00 UTC (4:00 p.m. ET):

Read More: In Effort to Differentiate, Litecoin Makes a Move to Privacy

Commodities:

  • Oil was up 2%. Price per barrel of West Texas Intermediate crude: $41.
  • Gold was in the green 0.46% and at $1,900 as of press time.

Treasurys:

  • U.S. Treasury bond yields all fell Wednesday. Yields, which move in the opposite direction as price, were down most on the two-year, dipping to 0.139 and in the red 4%.
https://www.coindesk.com/coindesk20

The CoinDesk 20: The Assets That Matter Most to the Market

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Cryptocurrencies: 16,229
Markets: 1,197
Marketcap: $ 3.49 T
24h Vol: $ 179.73 B
BTC Dominance: 54.99%