Market Wrap: With Low Volatility, Traders Seem to Like $9,000 Bitcoin

Over the past month, while market action has been relatively quiet, crypto traders have punched the buy button when bitcoin’s price drops below $9,000.

“Bitcoin managed to approach the level of $9,300, after which immediately rolled back to the $9,250 area,” said Constantine Kogan, partner at cryptocurrency fund of funds BitBull Capital. “The coin continues to trade in a narrow price range,” he said, adding that crypto markets are experiencing record low volatility. 

Read More: Exchanges See Drop in Volumes as Bitcoin Volatility Approaches 2020 Low

“Such low volatility is uncharacteristic of bitcoin,” said Vishal Shah, an options trader and founder of derivatives exchange Alpha5. “However, this sentiment has permeated through the trading community.” 

Less volatility has translated into fewer options bets. Open interest has dropped since the June 26 expiration date and is now hovering at the $1.1 billion mark. That’s quite a bit off from where it was in June, when it hit a record $1.8 billion high, according to derivatives data aggregator Skew.

The lack of action is causing vigilant traders to change their strategies. For example, there appears to be sentiment that bitcoin at $9,000 is a good price point for traders to buy. “Every time the market has poked its nose below $9,000, buyers have stepped in,” said Rupert Douglas, head of institutional sales at London-based broker Koine. 

Indeed, over the past month, when the world’s oldest cryptocurrency dipped below $9,000, traders scooped it up on spot markets like Coinbase. 

Douglas says the narrow bitcoin price action might not last because most traders surely would like more volatility, which is what attracts many to crypto in the first place. “Bitcoin is coiled for a big move,” he told CoinDesk. “I still favor the upside. I think we will see bitcoin heading above $11,000 in short order when a move comes.” 

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Ether (ETH), the second-largest cryptocurrency by market capitalization, was in the red Tuesday, trading around $237, down 0.66% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

Read More: Ethereum Activity Metric Hits Highest Level in 2 Years

Ethereum-based decentralized exchanges, or DEX, have shined in 2020, with over $5 billion in volume this year so far, according to aggregator Dune Analytics. Kyber Network, a DEX and token project, recently upgraded to its Katalyst and KyberDAO protocol version. This has led to its governance token, Kyber Network Crystal, or KNC, to jump from $0.18 at the start of 2020 to $1.64 Tuesday. 

Traders are purchasing the Kyber token for its rewards as “staking” KNC generates an ether-based return on fees paid for using the DEX. “Kyber has upgraded to Katalyst,” said Peter Chan, a quantitative trader at Hong Kong-based OneBit Quant. “There has been a staggering 6 million staking in KNC already, very impressive.”

Read More: Industry Group Seeks to Get Ahead on Staking Regulations

Digital assets on CoinDesk’s big board are mixed Tuesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

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Notable losers as of 20:00 UTC (4:00 p.m. ET):

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