Market wrap: Bitcoin slips to $ 30.8K as investors reintroduce BTC into DeFi

Bitcoin has been in the $ 30,000- $ 35,000 range for almost a week at a time when some market participants are looking for ether and other cryptocurrencies to trade during the perceived slump.

The price of Bitcoin fell on Tuesday, dropping as low as $ 30,875 around 3:00 p.m. UTC (10:00 a.m.ET) before rising again, changing hands around $ 32,003.

The drop came after the world’s oldest cryptocurrency hit nearly $ 35,000 on Monday, noted Constantine Kogan, partner of investment firm Wave Financial, also bearish on current market conditions. “I expect it to drop to $ 29,000,” he told CoinDesk. “Apparently some of the keepers and whales have sold their positions.”

Kogan noted some positive news this week that hasn’t moved the bitcoin market much. “Marathon has invested $ 150 million in Bitcoin and intends to become the world’s largest miner, ”he said. “Crypto funds are setting records, but there hasn’t been growth at the same time.”

Read more: Crypto Miner Marathon Patent Group buys $ 150 million in Bitcoin

The last time bitcoin exceeded $ 35,000 was almost a week ago on January 20, according to data from CoinDesk 20.

“Many crypto traders and macro traders were forecasting a decline of around 30% from the all-time high two weeks ago,” noted Brian Mosoff, chief executive of investment firm Ether Capital. “Now that it appears to have stabilized in the $ 30,000, traders are treating this as an opportunity to stand up and get a head start on the next step.”

Tuesday looked like a fairly expensive day for long Bitcoin leverage, with funding rates declining slightly from Monday. This was a change from the excitement of the past 90 days, when mark-ups could exceed 0.2% at some sites during the mad rise in prices to the all-time Jan. 10 high of $ 40,986.

Some are using Bitcoin’s valuation against other cryptocurrencies as a signal for what’s to come in the market.

“I have a strong feeling towards the ether as a leading indicator for an alternative season ahead,” Zachary Friedman, COO of Global Digital Asset, told CoinDesk, referring to market conditions that favor “alts” or alternative crypto-currencies.

Friedman pointed out that bitcoin’s dominance, its percentage share of the total crypto market cap, is declining. Indeed, since the start of 2021, bitcoin’s dominance has fallen by more than 10%.

“BTC dominance is declining as profits are redistributed and ETH sits just off its all-time high provides an immediate opportunity for new entrants to the market to diversify their holdings and seek returns. additional, ”Friedman added.

Ether (ETH), the second largest cryptocurrency by market cap, was down on Tuesday around $ 1,340 and down 2.2% in 24 hours at 9:00 p.m. UTC (4:00 p.m. ET).

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On Monday, the amount of bitcoin held in decentralized finance, or DeFi, jumped back to over 40,000 BTC for the first time since mid-December. At the time of publication, 42,604 BTC were ‘locked in’ in DeFi, which investors do to get a ‘return’ in return for providing liquidity.

Mosoff of Ether Capital says the rotation to DeFi is simply that investors are looking for juicier opportunities as the bitcoin market appears to be in a lull.

“Holders are anticipating the ‘alternate season’ and want to use their bitcoin to take advantage of additional exposure to other opportunities in the crypto space, be it DeFi tokens or other Layer 1s such as Ethereum, Polkadot, Solana, NEAR, etc. ” Mosoff said. “Many of these projects are currently very dynamic and are well placed for investor participation.”

Digital assets on CoinDesk 20 are mostly Red Tuesday. Notable Winners at 9:00 p.m. UTC (4:00 p.m. ET):

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