Bitcoin hit $ 12,000, but then fell as long-term derivatives traders were wiped out. Meanwhile, the DeFi loan is growing.
- Bitcoin (BTC) is trading at $ 11,884 as of 20:00 UTC (4 pm ET). Getting 1.8% in the previous 24 hours.
- The 24-hour range of Bitcoin: $ 11,468- $ 12,084
- BTC above its 10-day and 50-day moving averages, a Bullish signal for market technicians.
Bitcoin could only rise to $ 12,084 on spot exchanges like Coinbase only to fall 4.5% a few hours later. Leverage may have played a large part in their initial runup and the sudden move to, according to Denis Vinokourov, head of research for Bequant, a London-based prime broker.
Read more: Bitcoin suddenly drops by $ 500 after passing $ 12K
Indeed, bitcoin traders on derivatives exchanges BitMEX were distracted on the price ride up and back down. As the price of bitcoin rose, short-position traders lost more than $ 2.5 million, the crypto equivalent of a margin call. Then, when the price of bitcoin declined, long position traders lost more than $ 8.4 million.
Vinokourov expects that more short-term action in the derivatives market will affect the price of bitcoin. This is due to very low perpetual rates imposed on charges on derivative platforms such as BitMEX. “With perpetual rates flat to slightly positive, leverage will likely revisit its fortunes and seek to squeeze into the mid- $ 12,500 zone,” Vinokourov told CoinDesk.
Aaron Suduiko, head of research liquidity provider SFOX, says that the volatility of the market is increasing, but the way it is done may be a Bullish sign.
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“What we have seen since late July are BTC / USD (US dollar) price increases, followed by smaller, relatively rapid drops. One pattern that has historically been consistent is taking profits during a broader trend of price increases, “Suduiko said.
Bitcoin has been up 30% since the beginning of July, and Suduiko notes on a variety of factors for bitcoin bullish. “In the context of sustained trading volume, increased signals of institutional entry and concerns about the potential devaluation of the dollar, it is possible that this may represent a broader interest in the value of bitcoin instead of a fluctuating rise in price,” he said.
DeFi debt is record
Ether (ETH), the second largest cryptocurrency by market capitalization, traded around $ 395 on Monday, up 1.2% in 24 hours from 20:00 UTC (16:00 ET).
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Ethereum-powered decentralized finance (DeFi) outstanding debt hit a record high on Monday, crossing $ 1.56 billion, according to data aggregator DeFi Pulse.
In exchange for proceeds, lenders place crypto in these lenders platforms. For example, rates for lenders of stablecoins usdc and dai on platformdydx are currently more than 7%.
John Wu, president at AVA Labs, an upcoming DeFi blockchain with an active test network for developers, says old-school financial institutions cannot compete with the rates provided by DeFi, which helps interest in space fuel.
“While yields from traditional investment vehicles are reaching record highs, crypto-smart investors are finding returns in DeFi protocols, ”he said. “They are ready to mitigate the systemic risks they see in traditional finance for the product risks of this mature ecosystem,” he added.
Other brands
Digital assets on CoinDesk 20 are mostly in Green Monday. Notable winners since 20:00 UTC (16:00 ET):
- 0x (ZRX) + 12.5%
- neo (NEO) + 12.1%
- qtum (QTUM) + 8.1%
Read more: Link’s trading volume on Coinbase is about that of Bitcoin
Notable losers since 20:00 UTC (16:00 ET):
Read more: Bittrex and Poloniex move for summary judgment in cases of manipulation
Read more: Bitcoin transaction costs dropped 58% last week as Congestion demanded
- Oil is up 1.1%. Price per barrel of West Texas Intermediate crude: $ 42.03
- Gold is down 0.56% and at $ 2,024 as of press time.
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- US Treasury bonds were mixed on Monday. Yields, moving in the opposite direction as price, were most down on the two-year, in the red 4.2%.
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