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Market Wrap: Bitcoin Returns Above $46K; ‘Bored Apes’ Fetch $24M

Some analysts see a temporary retracement for bitcoin and expect buyers to step in.

Sep 9, 2021 at 8:33 p.m. UTC
Updated Sep 9, 2021 at 8:33 p.m. UTC

Bitcoin’s price is back above $46,000 on Thursday but the cryptocurrency is down about 4% over the past week, with some technical indicators suggesting bitcoin is oversold.

Some analysts view that selling as a temporary retracement and expect buyers to step in. “Leverage longs are flushed with funding rates reset and expect bitcoin to continue trading in an upward channel,” crypto investment firm StackFunds wrote in a report published on Wednesday.

“Bitcoin had seven consecutive weeks of positive upward momentum, which led to an overheated backdrop,” Ulrik Lykke, executive director of crypto hedge fund ARK36, said during an interview with CoinDesk.

“We managed to scale a little off some positions, but I expect upward momentum to keep going,” Lykke said. The fund is concentrated in bitcoin and ether and recently increased positions during the latest sell-off.

“The biggest upside potential is in the application domain of digital assets,” Lykke said, referring to the fund’s third-largest holding in the Polkadot blockchain’s DOT token, which rallied about 50% over the past month, compared to a 3% rise in bitcoin during the same period.

Latest prices

  • Bitcoin (BTC): $46,598, +0.6%
  • Ether (ETH): $3,470, -1.3%
  • S&P 500: -0.5%
  • Gold: $1,792, +0.2%
  • 10-year Treasury yield closed at 1.297%

On Thursday, the European Central Bank said it will slow the average pace of asset purchases but will keep the overall size of its quantitative easing program intact.

Cryptocurrencies and risky traditional assets like stocks have been major beneficiaries of the liquidity-boosting programs launched by global central banks, wrote CoinDesk’s Omkar Godbole.

Elsewhere, the market for non-fungible tokens (NFT) is heating up. A collection of 101 Bored Ape Yacht Club (BAYC) NFTs sold for $24.4 million at a Sotheby’s auction Thursday.

Volatility returns

“Realized volatility is now on the rise and it’s very possible the market goes through a period of ranged price action,” crypto research firm Delphi Digital tweeted on Thursday. The chart below shows the increase in 10-day and one-month realized volatility for BTC and ETH during the crypto sell-off earlier this week.

Implied volatility, however, is still low compared to the sell-off in May, although some analysts don’t expect choppy trading conditions to persist this month.

“We are structurally short vega in both ETH and BTC,” crypto trading firm QCP Capital wrote in a Telegram chat.

Short vega is an options strategy that becomes profitable when the implied volatility of the underlying asset decreases. The trader is essentially short further out of the money options and long front-month options.

QCP said it recently added to short vega positions and expressed uncertainty regarding short-term price direction.

Bitcoin supply slips from profit zone

During Tuesday’s sell-off, over 10% of bitcoin supply transitioned from holding an unrealized profit to now holding an unrealized loss, according to data from Glassnode.

This indicates an on-chain cost basis between $45,800 and $52,600 BTC, which is where the price is currently consolidating after the sell-off.

Bored Ape NFT collection fetches $24M at Sotheby’s auction

A collection of 101 Bored Ape Yacht Club (BAYC) non-fungible tokens sold for $24.4 million at a Sotheby’s auction Thursday. The sale figure implies an average price of $241,515 per ape NFT and exceeded Sotheby’s initial estimate for the total collection of $12 million to $18 million.

BAYC NFTs are currently selling at a floor of 40 ETH on NFT marketplace OpenSea, or approximately $140,000. The sale did not appear to substantially impact the price of BAYC NFTs, which hovered around that level throughout the duration of the auction, which ran from Sept. 2 to Sept. 9.

The NFT space topped $5 billion in sales volume in August, completing its best month ever, according to a report by decentralized application (dapp) store and data provider DappRadar.

However, there are signs the NFT boom may be slowing in September. WuBlockchain tweeted, “OpenSea’s daily trading volume is showing a downward trend. The single-day trading volume on September 8 was below 100 million for the first time since August 21. Compared with the peak trading volume on August 29, it has dropped by about 3/4.”

(Dune Analytics)

Altcoin roundup

  • Solana-based game DeFi Land raises $4.1 million to teach users basics of decentralized finance: DeFi Land, which aims to gamify concepts in decentralized finance (DeFi), is set to launch later this year with a test version available to investors next week, reported CoinDesk’s Helene Braun. Over 40 investors participated in the funding round, including Animoca Brands, Alameda Research, Jump Capital and NGC Ventures. The round also included investments from the Solana Foundation, Gate.io and others.
  • FTX’s Sam Bankman-Fried called Solana’s rally “decently organic”: Solana’s recent surge has seen its price increase by over 400% in the last 30 days, eclipsing XRP as the world’s sixth-largest cryptocurrency by market cap. Bankman-Fried said the coin’s growth despite little marketing could mean the crypto’s current price run is built on a sturdier foundation. He said it gave him comfort that the price of Solana was less likely to be the product of a “giant marketing push” or “multi-level marketing scheme-driven bulls**t.” “It is much more likely to be decently organic and that’s always been Solana’s calling card,” he said in webinar on Thursday.
  • Fintech company Rivetz sued by SEC over 2017 ICO: The U.S. Securities and Exchange Commission (SEC) is suing Rivetz, a now-defunct crypto payments startup, over its $18 million initial coin offering (ICO) in 2017, which the SEC says was an unregistered securities offering. The SEC says Rivetz’s CEO used some of the money to award himself a bonus and buy a house in the Cayman Islands, reported CoinDesk’s Cheyenne Ligon. The SEC alleged Thursday that between June and September of 2017, Rivetz and its CEO, 58-year-old Steven K. Sprague, marketed and sold RvT tokens to over 7,200 investors around the world, including the United States.

Relevant news

Other markets

Most digital assets in the CoinDesk 20 ended the day higher.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

  • Algorand (ALGO), $2.41, +37.7%
  • Polkadot (DOT), $30.13, +6.4%

Notable losers:

  • Filecoin (FILE), $87.00, -3.3%
  • Dogecoin (DOGE), $0.25, -2.0%

DISCLOSURE

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.

Damanick does not own cryptocurrencies.

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