Bitcoin was up Tuesday despite lower-than-average spot volumes. Meanwhile, ether’s price hits record high and the cyrpto’s dominance is back at February levels.
Bitcoin (BTC) trading around $54,840 as of 21:00 UTC (4 p.m. ET). Gaining 1.4% over the previous 24 hours.
Bitcoin’s 24-hour range: $52,722-$55,261 (CoinDesk 20)
BTC near the 10-hour and well above the 50-hour moving average on the hourly chart, a bullish signal for market technicians.
The price of bitcoin climbed as high as $55,261 around 17:00 GMT (12 PM ET) before settling to $54,840 as of press time.
It’s possible the world’s largest cryptocurrency by market capitalization could be headed higher.
“A test of the $56,000 mark will soon follow, then will most likely roll back,” said Constantine Kogan, a partner at investment firm Wave Financial.
According to CoinDesk 20 data, bitcoin was last at $56,000 on April 20, when it declined from the all-time high price of $64,829 reached April 14.
The rise this week comes after bitcoin’s price went as low as $47,272 on Sunday.
Stefan Coolican, chief financial officer for investment firm Ether Capital, says dumps and recoveries are just part of the crypto market. “I think the weekend sell-off was overdone, personally, so a bounce back makes sense,” Coolican said.
Spot bitcoin exchange volumes for Tuesday were around $2.6 billion as of press time, compared with the past three months’ average of $5.1 billion of BTC changing hands daily.
It’s possible larger players are the ones in the market this week, with retail and new investors remaining cautious because of crypto’s notorious gyration. This caused lower volumes Tuesday.
“Bitcoin is an information-asymmetry environment,” Wave’s Kogan said. “A small number in the community are aware of impending price changes, and only a small number of global venues are able to manage these large trades.”
Despite the volume doldrums, a positive news cycle is affecting bitcoin’s price, Kogan said.
“JPMorgan is preparing to launch an actively managed bitcoin fund for high-net-worth clients,” Kogan said. “Tesla announced the sale of part of [its] bitcoins and profit taking, which is also positive. This helps the bullish trend. ”
Ether price hits fresh new high
The second-largest cryptocurrency by market capitalization, ether (ETH), was up Tuesday, trading around $2,631 and climbing 5.2% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
Ether rose Tuesday to a record high price near $2,700 after a powerful three-day rally.
The price of ether, the native cryptocurrency of the Ethereum blockchain, climbed as high as $2,683.30 around 16:00 UTC (12 p.m. ET), based on CoinDesk data.
The new high came after three straight daily gains totaling 19%. The move extended the cryptocurrency’s stunning rally this year. Ether’s price has tripled thus far in 2021, in part thanks to trader enthusiasm over growth in decentralized finance (DeFi) and non-fungible tokens, both of which use the Ethereum blockchain. Bitcoin (BTC), by comparison, is up 89% this year.
“Ether has picked up its head and looks poised for a few more days of outperformance,” said Katie Stockton, a technical analyst for the consulting firm Fairlead Strategies.
Technical progress on Ethereum may be enticing investors to buy, said Ether Capital’s Coolican.
“It’s just more people understanding the value [proposition] of Ethereum and the token accrual model with proof-of-stake and EIP 1559,” Coolican told CoinDesk. Proof-of-stake is the more efficient form of consensus for cryptocurrency networks to which Ethereum is upgrading, and EIP 1559 is a development proposal expected to reduce fees on the network.
On a day when all major assets on the CoinDesk 20 were up, the meme-centric cryptocurrency dogecoin (DOGE) was struggling to stay in the green.
Wave Financial’s Kogan says interest in DOGE waxes and wanes at its own rhythm. “They are good in memes creation, I give them that. But I’m very skeptical about this Doge mania,” he told CoinDesk. “It may end up badly, with retail investors losing a lot of money. Or, better to say, when it will happen.”
Digital assets on the CoinDesk 20 are all green Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
Oil was up 2%. Price per barrel of West Texas Intermediate crude: $63.19.
Gold was in the red 0.27% and at $1,776 as of press time.
Silver is gaining, up 0.33% and changing hands at $26.27.