Bitcoin’s trading volume was lower on Monday compared to the latter part of last week but traders appear to be staying optimistic ahead of the expected bitcoin halving next week.
Bitcoin (BTC) was trading down less than 1 percent over 24 hours , with 10-day and 50-day technical indicator moving averages signaling bearish sentiment Monday. In early trading at 00:00 UTC, the world’s first cryptocurrency’s price tumbled from $8,950 to $8,533 but rebounded to at $8,837 as of 20:00 UTC (4 p.m. EDT).
As April turned to May, spot exchange Coinbase experienced larger-than-normal volume - numbers not seen since March 13, when the exchange had $673 million in total one-day trading for BTC/USD.
On Wednesday April 29, the San Francisco-based platform experienced a technical outage and had a $410 million volume. Thursday, April 30, the price for bitcoin on Coinbase rose to as high as $9,400 on $399 million in volume. Friday, May 1, saw Coinbase volumes down to $191 million into the weekend.
Volume on Coinbase for Monday is at $136 million as of press time. Rupert Douglas, head of business development, institutional sales at Koine, says there are fewer people hitting the Buy button to start the week. “We’re now overextended. I thought we would get to $9,550, but we fell short and it looks like a lack of buyers at these levels,” Douglas said.
Gabriel Kurman, a long-time bitcoin advocate and co-founder of Argentina-based blockchain software provider IOV Labs, is still incredibly bullish. Kurman is like a lot of traders, expecting the price of bitcoin to go up ahead of the expected May 12 halving. At that time, rewards for successfully mining a block in Bitcoin’s blockchain will be reduced to 6.25 BTC from 12.5 BTC.
“Even before factoring in the reduction of the bitcoin supply resulting from the halving, BTC should increase its dollar-denominated value by 30%, given its mathematical scarcity and immutability,” he said.
Mining power has been rising steadily as the halving approaches. The halving could result in less selling pressure in the market as some miners will likely turn off some machines post-halving, said Chris Bendiksen, head of research at digital asset manager CoinShares.
“The pairing of a 50% reduction in available new supply with a reduction in the proportion of ongoing supply offered for sale in the market might drastically reduce the persistent selling pressure caused by miners,” Bendiksen noted.
Traders will be keeping an eye on mining power after the halving to gauge selling pressure on bitcoin when miner rewards are reduced.
Most digital assets on CoinDesk’s big board performed poorly Monday. The second-largest asset by market capitalization, ether (ETH), lost 2.7% in 24 hours as of 20:00 UTC (4:00 p.m. EDT).
Oil is having another price gain, up 19% as of 20:00 UTC (4:00 p.m. EDT). Amid an economic slowdown due to coronavirus lockdowns, oil is down 65% year to date.
Gold is trading sideways, up less than 1 percent and closed the New York trading session at $1,703. While performance of the yellow metal has been flat in the past month climbing less than a percent, year-to-date gold is up 12%.
The S&P 500 Index of U.S. equities closed the day up less than 1 percent. U.S. Treasury bonds were mixed on the day. Yields, which move in the opposite direction as price, were down most on the two-year, slipping 7%.
The FTSE Eurotop 100 index of the largest European companies fell 3.3% on trading as travel stocks dragged down the equities markets Monday.
In Asia, the Nikkei 225 index in Tokyo was closed today for a holiday. Hong Kong’s Hang Seng index was down 4% Monday.
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