Bitcoin (BTC) traded lower on Wednesday after a brief price bounce over the past two days. Buying activity has been weak following the January sell-off, which is why some analysts remain uncertain about BTC’s short-term price direction.
Market indicators such as volatility and trading volume remain low, indicating a lack of conviction among crypto buyers and sellers. “Bitcoin’s seven-day volatility is now at the lowest level since November 2020,” Arcane Research stated in a report. The firm expects short-term rises in volatility to remain limited as BTC trades in a tight range.
Still, a BTC breakout above $40,000 or breakdown below $30,000 could be a catalyst for a surge in trading activity.
“Since the early November peak, there have been four marked, step-like drops in the crypto market,” FundStrat, a global research firm, wrote in a Wednesday briefing. “After each drop there has been a recovery averaging 8.9% leading into the next drop. A noticeable difference between the current recovery and the previous ones is the volatility,” FundStrat wrote.
The firm noted that during the past three price recoveries bitcoin had an average true range (ATR, a volatility indicator) of 151, but the current recovery’s ART is only 109.
Latest prices
?Bitcoin (BTC): $37557, -2.55%
?Ether (ETH): $2724, -1.56%
?S&P 500 daily close: $4589, +0.94%
?Gold: $1807 per troy ounce, +0.34%
?Ten-year Treasury yield daily close: 1.77%
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.
Ether outperforms bitcoin
Ether (ETH), the second-largest cryptocurrency by market capitalization, is starting to outperform bitcoin. The chart below shows a series of higher relative price lows in the ETH/BTC ratio since July 2020. The next level of resistance in ETH/BTC is at 0.08, a significant barrier which could limit additional upside in ETH relative to BTC.
Altcoin roundup
Solana Pay ushers in a new payments era: Solana Pay, a decentralized, open and peer-to-peer payment protocol, was launched Tuesday. It aims to pave the way for a future where digital currencies are prevalent and digital money moves through the internet like data – uncensored and without intermediaries taxing every transaction. The company says the protocol provides a specification that allows consumers to send digital dollar currencies, such as USDC, from their wallets directly into a merchant’s account, settling immediately with costs measured in fractions of a penny. Read more here.Sushi 2.0: SushiSwap is advancing into Sushi 2.0 with plans for some key improvements and product releases this year. Developers are aiming at three overriding goals: scalability, sustainability and efficiency – key factors even prevalent tokens are having difficulty balancing. Read more here.Cardano developers propose block size increase: Input Output, the development company behind the Cardano network, proposed increasing the network’s block size by 11% on Wednesday. The proposal will increase block size by a further 8 KB, taking it from 72 KB to 80 KB, according to CoinDesk’s Shaurya Malwa. Read more here.
Relevant news
Federal Reserve Bank of NY Lays Out Possible Stablecoin ScenariosGreenidge Q4 Revenue Rises Even as the Number of Coins Mined FallsCrypto Market Snoozes Through ADP Payroll ShockerDeutsche Bank Initiates Coverage of Metaverse Play Matterport, Sees Near 50% UpsideGrayscale Launches First Equity ETF Tracking New Joint Index With Bloomberg
Other markets
Digital assets in the CoinDesk 20 ended the day lower.
Largest gainers:
Asset
Ticker
Returns
Sector
Internet Computer
ICP
+10.2%
Computing
Ethereum Classic
ETC
+2.5%
Smart Contract Platform
Algorand
ALGO
+1.3%
Smart Contract Platform
Largest losers:
Asset
Ticker
Returns
Sector
Solana
SOL
-5.2%
Smart Contract Platform
Cosmos
ATOM
-4.4%
Smart Contract Platform
Stellar
XLM
-3.8%
Smart Contract Platform
Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.
Feedzy
Bitcoin (BTC) traded lower on Wednesday after a brief price bounce over the past two days. Buying activity has been weak following the January sell-off, which is why some analysts remain uncertain about BTC’s short-term price direction.
Market indicators such as volatility and trading volume remain low, indicating a lack of conviction among crypto buyers and sellers. “Bitcoin’s seven-day volatility is now at the lowest level since November 2020,” Arcane Research stated in a report. The firm expects short-term rises in volatility to remain limited as BTC trades in a tight range.
Still, a BTC breakout above $40,000 or breakdown below $30,000 could be a catalyst for a surge in trading activity.
“Since the early November peak, there have been four marked, step-like drops in the crypto market,” FundStrat, a global research firm, wrote in a Wednesday briefing. “After each drop there has been a recovery averaging 8.9% leading into the next drop. A noticeable difference between the current recovery and the previous ones is the volatility,” FundStrat wrote.
The firm noted that during the past three price recoveries bitcoin had an average true range (ATR, a volatility indicator) of 151, but the current recovery’s ART is only 109.
Latest prices
?Bitcoin (BTC): $37557, -2.55%
?Ether (ETH): $2724, -1.56%
?S&P 500 daily close: $4589, +0.94%
?Gold: $1807 per troy ounce, +0.34%
?Ten-year Treasury yield daily close: 1.77%
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.
Ether outperforms bitcoin
Ether (ETH), the second-largest cryptocurrency by market capitalization, is starting to outperform bitcoin. The chart below shows a series of higher relative price lows in the ETH/BTC ratio since July 2020. The next level of resistance in ETH/BTC is at 0.08, a significant barrier which could limit additional upside in ETH relative to BTC.
ETH/BTC price ratio on daily chart shows support/resistance with RSI on bottom (Damanick Dantes/CoinDesk, TradingView)
Altcoin roundup
Solana Pay ushers in a new payments era: Solana Pay, a decentralized, open and peer-to-peer payment protocol, was launched Tuesday. It aims to pave the way for a future where digital currencies are prevalent and digital money moves through the internet like data – uncensored and without intermediaries taxing every transaction. The company says the protocol provides a specification that allows consumers to send digital dollar currencies, such as USDC, from their wallets directly into a merchant’s account, settling immediately with costs measured in fractions of a penny. Read more here.
Sushi 2.0: SushiSwap is advancing into Sushi 2.0 with plans for some key improvements and product releases this year. Developers are aiming at three overriding goals: scalability, sustainability and efficiency – key factors even prevalent tokens are having difficulty balancing. Read more here.
Cardano developers propose block size increase: Input Output, the development company behind the Cardano network, proposed increasing the network’s block size by 11% on Wednesday. The proposal will increase block size by a further 8 KB, taking it from 72 KB to 80 KB, according to CoinDesk’s Shaurya Malwa. Read more here.
Relevant news
Other markets
Digital assets in the CoinDesk 20 ended the day lower.
Largest gainers:
Largest losers:
Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.
DISCLOSURE
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Subscribe to Crypto for Advisors, our weekly newsletter defining crypto, digital assets and the future of finance.