Market Wrap: Bitcoin Drops to $10.2K; Scaling Solution xDai Doubles in Value Locked

Bitcoin price dipped Wednesday while investors park crypto in Ethereum sidechain stablecoin xDai.

AccessTimeIconSep 23, 2020 at 8:28 p.m. UTC
Updated Sep 14, 2021 at 9:59 a.m. UTC

The bitcoin market continues to display weakness; xDai total value locked shows interest in Ethereum scaling solutions.

  • Bitcoin (BTC) trading around $10,285 as of 20:00 UTC (4 p.m. ET). Slipping 1.8% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $10,250-$10,575
  • BTC below its 10-day and 50-day moving averages, a bearish signal for market technicians.
Bitcoin trading on Coinbase since Sept. 21.
Bitcoin trading on Coinbase since Sept. 21.

Bitcoin’s price had remained in a narrow range since Monday, as the world’s oldest cryptocurrency stuck within $10,400 territory Wednesday before falling to as low as $10,250 just prior to press time.

“September has been a unique month in the crypto markets,” said Elie Le Rest, a partner at quant trading firm ExoAlpha. “Crypto has become way more thinly traded,” he added. 

Indeed, after the month opened with a rarely-seen $1 billion day on major exchanges September 3, bitcoin volume has weakened. It was at $202 million Wednesday as of press time.

BTC spot volume on major exchanges the past month.
BTC spot volume on major exchanges the past month.

As the bitcoin market remains tepid, the U.S. Dollar Index, a measure of the greenback versus a basket of other fiat currencies, is bouncing back from 2020 lows, in the green 0.40% as of press time.

The US dollar index in 2020.
The US dollar index in 2020.

Cryptocurrency traders like to keep an eye on the strength of the dollar, but many have differing views on what the index’s rise might mean. 

I see the Dollar Index going up as a correction after its performance during the pandemic,” said Alessandro Andreotti, an over-the-counter crypto trader in Italy. “On the mid- to long-term, I'm personally still bullish on bitcoin as well as on precious metals like gold.” 

Henrik Kugelberg, another European over-the-counter trader based in Sweden, said he expects the dollar will become deflationary, where the prices of goods and services drop. 

“I now feel convinced that what we see and will see is deflation and not inflation,” he said. “If this is correct, people will sell bonds and buy safer stuff, like high-end real estate, gold and bitcoin.” 

Whatever the trader narrative is on the dollar, this much is true: Based on Federal Reserve data, there are more dollars floating around the global economy than ever before.

The amount of M1 money stock, which includes USD, in circulation since 1975.
The amount of M1 money stock, which includes USD, in circulation since 1975.

As for bitcoin’s tepid performance the past few days, a loss of momentum for decentralized finance, or DeFi, this week may partially be to blame for a lackluster crypto market. “The recent crash in DeFi may explain the current market silence for the past two days as traders and lenders are figuring out next steps to allocate capital and execute trading strategies,” said ExoAlpha’s Le Rest.

xDai value locked doubles

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Wednesday trading around $327 and slipping 4.7% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Stablecoin xDai, developed via a collaboration between MakerDAO and POA Network, saw a jump in value locked to $1.2 million on Wednesday from $559,000 on Sept. 20.

The stablecoin offers capabilities on the Ethereum network with lower fees and without the hassles of slow block confirmations, a problem as DeFi grows. xDai accomplishes this by acting as a “sidechain” off of the main Ethereum blockchain network where transactions have often clogged the system during high-transaction activity the past few months.

Total USD value locked in xDai.
Total USD value locked in xDai.

XDai might be a tool for traders to better navigate DeFi in high-transaction times, said Brian Mosoff, chief executive officer of investment firm Ether Capital. “As we've seen in recent months, the use of Ethereum has skyrocketed, bringing with it rising gas costs,” said Mosoff. “Many use cases and participants may be better served using xDai, it offers an immediate scaling solution that allows people to stay in the Ethereum ecosystem.”

Other markets

Digital assets on the CoinDesk 20 are mostly in the red Wednesday. One notable winner as of 20:00 UTC (4:00 p.m. ET):

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



  • Oil was down 0.45%. Price per barrel of West Texas Intermediate crude: $39.54.
  • Gold was in the red 2% and at $1,860 as of press time.


  • U.S. Treasury bond yields all slipped Wednesday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 1.4%.
The CoinDesk 20: The Assets That Matter Most to the Market
The CoinDesk 20: The Assets That Matter Most to the Market


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