Market Wrap: Bitcoin Rises as Traders Accumulate Positions
Sentiment is improving as traders eye positive technical indicators.
Bitcoin held above the $46,000 support level on Wednesday as bullish sentiment improves. The cryptocurrency was up about 3% over the past 24 hours, compared with a 5% gain in ether, the world’s second-largest cryptocurrency by market value, over the same period.
“[Blockchain] metrics continue to show whale (large bitcoin buyers) accumulation,” Marcus Sotiriou, a trader at U.K.- based digital asset broker GlobalBlock, wrote in an email to CoinDesk.
“A four-hour bullish divergence on the relative strength index (RSI) indicator has been confirmed, indicating short-term continuation to the upside,” Sotiriou wrote. The RSI is now overbought on the four-hour chart, suggesting that buyers could struggle ahead of the $50,000 resistance level.
Traders are also awaiting the quarterly bitcoin options expiration date on Sept. 24, which could be a source of volatility. The chart below shows $50,000 is the strike with largest options open interest, according to Skew.
Bitcoin’s golden cross
Bitcoin has formed a “golden cross” on its daily price chart, a rare but closely tracked pattern that generally occurs when an asset is on the upswing.
The appearance of the golden cross marks a dramatic comeback for bitcoin since a “death cross” appeared in the price chart three months ago.
It’s worth noting that the indicator’s predictive power for future trends is limited.
James Butterfill, an investment strategist at CoinShares, warned in a LinkedIn post that traders should be “cautious” when pundits refer to the golden cross pattern as a bullish technical signal. The indicator “hasn’t been a consistent predictor of positive returns,” he said.
Stablecoins ready to push bitcoin higher?
Bitcoin’s stablecoin supply ratio (SSR), which measures the cryptocurrency’s supply relative to the total supply of stablecoins denoted in BTC, is starting to rise. Some analysts believe a higher SSR is positive for bitcoin’s price.
“SSR just tested support and is slowly climbing up,” CryptoQuant wrote in a blog post. A low SSR means stablecoins have more buying power against BTC and could therefore be used to acquire more bitcoin or altcoins, according to CryptoQuant.
SSR essentially serves as a proxy for the supply/demand mechanics between BTC and USD. Previous recoveries in SSR have coincided with a rise in BTC, similar to January 2019, as seen in the chart below. For more information, see this article from Glassnode.
- Solana mainnet is back online after day-long outage: Ethereum competitor Solana Engineers succeed in restoring service across Solana’s network of node-runners after the system was in the dark for almost 20 hours, reported CoinDesk’s Danny Nelson. In response to the outage, Solana Labs CEO Anatoly Yakovenko tweeted, “better now than when it’s a billion users.” SOL, the native token of the network, quickly popped over 3% upon news of the fix, reclaiming some lost ground but still short of yesterday’s highs. SOL had been down 13% to the mid-$140 range at Tuesday’s lowest point. Solana has been one of the hottest altcoins this year, returning over 7,000%.
- Ethereum founder Vitalik Buterin is named to Time’s ‘Most Influential’ list: The storied magazine gave a nod to the crypto wunderkind, reported CoinDesk’s Zack Seward. The inclusion in Time appears to be part of a low-key publicity tour for Buterin, who is also involved in a new documentary about Ethereum and is voicing a taxidermied cat in an animation project backed by actress Mila Kunis and actor Ashton Kutcher. “What makes Vitalik so special, though, is that he is a builder’s builder,” Reddit co-founder Alexis Ohanian wrote for Time. “No one person could’ve possibly come up with all of the uses for Ethereum, but it did take one person’s idea to get it started.”
- NFT marketplace OpenSea faces insider trading allegations: OpenSea, a marketplace for non-fungible tokens, issued a statement Wednesday saying it had uncovered evidence of insider trading by one of its employees, reported CoinDesk’s Will Gottsegen. “Yesterday we learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly,” the statement reads. The company says it’s implementing new policies that prohibit that kind of behavior.
Most digital assets in the CoinDesk 20 ended the day higher.
Notable winners as of 21:00 UTC (4:00 p.m. ET)
- Filecoin (FIL), $85.41, +7.5%
- EOS (EOS), $5.11, + 6.8%
- Polkadot (DOT), $36.69, -1.6%
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.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.