Bitcoin Rises Above $50K After Ether’s Biggest Single-Day Gain in 6 Weeks

“Coinbase buyers are back,” one analyst says.

AccessTimeIconSep 2, 2021 at 4:07 p.m. UTC
Updated May 11, 2023 at 5:28 p.m. UTC
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Bitcoin is gathering steam in the wake of ether’s rally to a 3 1/2-month high on Wednesday.

The top cryptocurrency by market value crossed the $50,000 mark for the first time since Aug. 23 and is trading 2.7% higher on the day at press time, CoinDesk 20 data show.

The advance comes a day after ether, the native token of Ethereum’s blockchain, jumped above $3,800 to reach its highest level since mid-May. Ether ended the day with an 11% gain, the biggest single-day rise since July 21, and analysts foresee continued advances.

Bitcoin is also looking north, with data pointing to bullish bias among large investors. The Commitments of Traders (COT) report published by the U.S. Commodity Futures Trading Commission (CFTC) on Aug. 27 showed asset managers holding record long exposure of $165 million. “The net exposure of asset managers is positive for the first time since April, indicating that the institutions have turned bullish on bitcoin,” Arcane Research noted in a weekly report published Tuesday.

Some observers are citing the recent decline in bitcoin balances held on the Nasdaq-listed Coinbase exchange as evidence of fresh demand from large investors.

“Coinbase buyers are back,” William Clemente, lead insights analyst at Blockware Solutions, tweeted early today along with a chart from Glassnode showing the number of bitcoin balances falling by 32,000 BTC since Aug. 23. As of Wednesday, Coinbase held 709,695 BTC, the lowest number since 2017.

Coinbase outflows are often taken to represent institutional demand, as the exchange offers custody services directly integrated with its over-the-counter (OTC) desk. Institutions typically conduct transactions over the counter to avoid influencing the spot-market price. However, some observers are skeptical of the bullish Coinbase theory. CoinDesk’s Galen Moore noted in April that stablecoins have replaced bitcoin as the dominant quote currency and outflows represent that trend.

That said, other blockchain metrics point to renewed accumulation by investors. In a report published Tuesday, blockchain data company Santiment said the number of bitcoin held by addresses with between 100 and 10,000 BTC has climbed over the past week, signaling renewed confidence among some bitcoin whales, or larger investors.

“After a shaky start to the month, the combined balance of these holders has increased by roughly 30,000 BTC [worth $1.5 billion] in the last seven days, and now amounts to 48.95% of Bitcoin’s total circulating supply,” Santiment noted. Address metrics are not perfect indicators because a single investor can hold multiple addresses.

On-chain supply dynamics warrant a price of $58,000, according to Blockware Solutions’ Clemente. From a technical analysis standpoint, bulls need to establish a foot hold above $50,000 for a move toward the next resistance at that level.

UPDATE (SEPT. 2, 08:56 UTC): Adds investor actions, analyst quotes.


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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

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