Market Wrap: Bitcoin Stops At $ 36.4K As Ether Flies Over $ 1.4K

Trade action in the bitcoin market slowed on Tuesday as the price of ether broke new ground.

The price of bitcoin remained in a fairly tight range on Tuesday, spending most of the US trading hours between $ 36,200 and $ 37,200. At around 3:00 p.m. UTC (11:00 a.m. ET), the price climbed to $ 37,876 before dropping down and was $ 36,483 at the time of publication.

“It is interesting to note yesterday that bitcoin maintained its price in a calm US market with the [Martin Luther King Day] vacation, ”said Chris Thomas, Head of Digital Assets at Swissquote Bank. “It also suggests that US clients, both retail and institutional, are quite important.”

Read more: Bitcoin price must exceed $ 40K to stop the exodus of traders: JPMorgan

“We had two failed attempts to break and stay above $ 40,000, but we saw that at $ 20,000 and $ 30,000 as well,” Thomas said. “I guess we’ll spend $ 40,000 in a day or two.”

In the meantime, as prices remain less volatile than before, traders seem to add more risk.

“Looks like while bitcoin is stuck between a tightening range of $ 34,000 to $ 38,000 last week, the market is taking longer to capitalize,” noted Cindy Leow, portfolio manager for the trading firm. multi-strategy 256 Capital Partners.

Leverage funding at major sites remains high, according to data aggregator Skew. Kraken in particular has shown a high degree of volatility in funding rates, but as of Tuesday it is offering the most to crypto holders to provide liquidity for long leverage, at 0.0471%.

“We see this as bearish in the short term, indicating that too many market participants are eager to break up,” Leow added. “On top of that, the sellers seem exhausted and the market is very dollar short with sparkling USD / Stablecoin lending rates.”

According to DeFi Pulse, loans in the decentralized finance, or DeFi, market topped $ 12 billion, with the stablecoin Maker dai (DAI) taking over 39% of that share. Dai currently accounts for $ 4.7 billion of the DeFi loan market, up more than 11% on Tuesday.

Part of that DeFi spike is also coming from a rise in the price of ether, which saw a breakout on Tuesday to new highs as bitcoin remained relatively calm. “Ether looks really strong and I think we are now entering a race between $ 2,000 ETH and $ 50,000 BTC,” said Thomas of Swissquote.

“We see that ETH is likely facing some resistance at its all-time high, similar to how BTC was initially rejected in November 2020 at its previous high of $ 19,000 before resuming an uptrend.” said Leow of 256 Capital.

Ether (ETH), the second largest cryptocurrency by market capitalization, rose on Tuesday, trading around $ 1,384 and climbing 12.7% in 24 hours at 9:00 p.m. UTC (4:00 p.m. ET).

The ether spot price hit an all-time high on Tuesday, rising to $ 1,439 and just above its previous high of $ 1,432.88 set on January 13, 2018.

Read more: Ethereum’s Ether Cryptocurrency Sets All-Time New Price Near $ 1,440

George Clayton, managing partner of crypto fund Cryptanalysis Capital, questions the fundamentals of the rise of ether as bitcoin does not appear to correlate with the rise of ETH. “Interesting price action,” Clayton told CoinDesk.

He noted that average network charges typically increase with these prices, which actually affects usability. Ethereum’s DeFi projects become more expensive to use during price changes because a processing fee, or “gas” in ether increments, is required for its use.

“With fees at such astronomical levels, Ethereum is becoming sclerotic and proprietary,” Clayton added. “Hopefully ETH 1.5 and rollups will relieve the pressure.”

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

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