Indeed, since the start of July bitcoin has struggled to break out of $9,000-$9,200 territory
The market at $9,200 per bitcoin erased gains earlier in the week when the world’s oldest cryptocurrency popped to $9,400 Wednesday.
Two days ago, bitcoin rallied 1.9% then dropped 2.1% and is now flat. Just another failed breakout, said Elie Le Rest, partner at quantitative trading firm ExoAlpha. Still, traders buying when prices dip isn’t providing enough momentum to significantly move the market higher, Le Rest added. There’s less and less amplitude to move, so we should see in the next couple of days how this resolves.
Several traders pointed to $9,400, where momentum might turn into a bullish market.
The price of bitcoin again returned to the range of $9,000-$9,200 after the asset again failed to pass a key level at $9,392, said Constatin Kogan, a partner at cryptocurrency fund BitBull Capital.
Indeed, since the start of July bitcoin has struggled to break out of $9,000-$9,200 territory.
Josh Rager, a trader and adviser of crypto brokerage LevelInvest, says it will be hard to get back to Wednesday’s $9,400 price range for the time being. I think bitcoin drops short of $9,400 to make another lower high on the trend, he said.
However, bets in the options market overwhelmingly favour bitcoin higher than $9,200, with options on $11,250 per BTC especially popular.
Nonetheless, options volumes continued to trend down, changing the trader profile, noted Vishal Shah, founder of Alpha5. This is only traders that play options on the high-end of the risk spectrum, Shah said.
ExoAlpha’s Le Rest predicted a wide range where price might head into the weekend and beyond. We’re pretty neutral as it could really go both ways – up to $9,450 on way to tackle $10,000 once again, or down to $8,200, he said.
The second-largest cryptocurrency by market capitalization, ether (ETH), was flat Friday, trading around $239 and in the red 0.10% in 24 hours. Ether is up 84% in 2020, outperforming bitcoin’s 28% year-to-date gains.
The amount of bitcoin on DeFi, which mostly runs on the Ethereum network, has risen from 5,000 to 15,000 BTC in the past month. That is a 200% increase, according to data aggregator DeFi Pulse.
By locking bitcoin in DeFi, investors are able to earn a reward, or “yield,” without having to trade into another asset such as ether. In July’s low spot exchange volume environment, traders might be increasingly locking crypto rather than trading it.