First Mover: Bitcoin 'Comatose' Under $16K for Rest of 2020, While Ether Traffic Eases

Bitcoin is stuck in an ever-tightening range between $10.5K and $10.8K and appears set for a breakout, though options trading suggests $16K might represent an upper bound in 2020.

Oct 8, 2020 at 12:54 p.m. UTC
Updated Sep 14, 2021 at 10:06 a.m. UTC

A slowdown in cryptocurrency trading on so-called decentralized exchanges has helped to alleviate congestion on the Ethereum blockchain, at least temporarily mitigating concerns the network was becoming overloaded.

The trading lull comes as prices tumble for many of the hottest tokens from the fast-growing arena of decentralized finance, or DeFi. SushiSwap’s SUSHI token, one of this year’s splashiest debuts , fell by 77% in the past 30 days, while DeFi lender Compound’s COMP tokens lost 37%.

On Uniswap, the biggest decentralized exchange, or DEX, daily trading volumes have crashed to $224 million, versus a record high of $954 million on Sept. 1. 

“Low volatility in the crypto market as a whole has contributed to lower transaction volume and costs,” said Connor Abendschein, a crypto research analyst at Digital Assets Data.

DeFi, a subsector of the cryptocurrency industry where entrepreneurs are developing semi-automated trading and lending platforms atop blockchain networks, had surged in popularity in recent months among investors and traders alike. But the resulting congestion raised concerns elevated fees for sending transactions over the blockchain might stymie some users, or push application developers to consider alternative networks

- Omkar Godbole

CoinDesk - Unknown

Daily transactions on Ethereum blockchain.

Bitcoin Watch

CoinDesk - Unknown

CME bitcoin options volume.

Bitcoin remains comatose around $10,600 even though optimism has returned to equity markets. 

S&P 500 futures are pointing to a positive open with a 0.53% gain. Stock markets in Asia and Europe eked out gains earlier today on renewed expectations for an additional U.S. fiscal stimulus. 

The "risk-on" is weighing over the safe-haven U.S. dollar in the forex market. So far, however, that dollar weakness hasn't propelled bitcoin higher. 

The top cryptocurrency is currently trading around $10,600, down 0.6% on the day. 

And while the cryptocurrency remains stuck in a narrowing price range for the third week, activity in options listed on the Chicago Mercantile Exchange has picked up the pace. 

CME options trading volume surged by 300% to $48 million on Wednesday. The surge was fueled by increased activity in call options, according to Emmanuel Goh, CEO of crypto derivatives research firm Skew. 

Traders likely employed bull spreads by buying December expiry call options at $14,000 and simultaneously selling December expiry calls at $16,000. Similarly, calls expiring in March 2021 were bought at $18,000 and sold at $20,000.

These traders foresee a bitcoin price rally but believe the upside will be capped near $16,000 till the end of this year and $20,000 in the fist quarter of 2021.

- Omkar Godbole

Token Watch

EOS (EOS): Alternative blockchain's ecosystem gets boost for trading liquidity as non-custodial digital-asset exchanger Eosfinex launches beta version, though Google Cloud does not intend to take EOS rewards as a block producer

Aave (LENDAAVE): Blockchain data reveal increasing large-volume transactions in LEND tokens, suggesting "whale" accounts are migrating to the new AAVE governance tokens, IntoTheBlock writes .  

What's Hot

Analogs

The latest on the economy and traditional finance

Tweet of the Day

CoinDesk - Unknown

Sign up to receive First Mover in your inbox, every weekday.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

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.

Trending

1
CoinDesk - Unknown
Market Wrap: Cryptos Decline Amid Bearish Sentiment

The bitcoin Fear & Greed Index reached its second-lowest record fear level in history. Analysts expect a period of lower returns.

The bitcoin Fear & Greed Index reached its second-lowest record fear level in history. Analysts expect a period of lower returns.

CoinDesk - Unknown
2
CoinDesk - Unknown
FTX's Bankman-Fried Is Already a Political Mega-Donor. He's Doubling Down

The effective altruist has given tens of millions of dollars to candidates. He's planning to contribute hundreds of millions of dollars more.

The effective altruist has given tens of millions of dollars to candidates. He's planning to contribute hundreds of millions of dollars more.

CoinDesk - Unknown
3
CoinDesk - Unknown
Oslo Freedom Forum and Why Bitcoin Matters

The annual conference showcases people and ideas working to increase freedom throughout the world.

The annual conference showcases people and ideas working to increase freedom throughout the world.

CoinDesk - Unknown
4
CoinDesk - Unknown
Exchange argentino Buenbit reduce 45% de su personal por recesión en la industria tecnológica

La empresa se enfocará en sus operaciones actuales en Argentina, México y Perú, y pondrá freno al plan de expansión a otros países.

La empresa se enfocará en sus operaciones actuales en Argentina, México y Perú, y pondrá freno al plan de expansión a otros países.

CoinDesk - Unknown