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Market Wrap: Bitcoin Hits $18.4K; $260M in Ether Options Expire in December


Higher spot volumes Wednesday – and record volumes for the past month – are helping push bitcoin higher. Meanwhile, ether options for December pass 550,000 ETH.

  • Bitcoin (BTC) trading around $17,688 as of 21:00 UTC (4 p.m. ET). Gaining 0.17% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $17,571-$18,474 (CoinDesk 20)
  • BTC below its 10-day moving average but above the 50-day, a sideways signal for market technicians.

dbtcnov18

Bitcoin trading on Bitstamp since Nov. 16.
Source: TradingView

Bitcoin made gains for the third straight day this week, going as high as $18,474 according to CoinDesk 20 data. The price slipped, however, to $17,688 as of press time. 

Read More: Bitcoin Indicator Suggests Bull Market Is Still in Early Phase

The last time bitcoin was in this range occurred way back in December 2017. “In general, the market sentiment is still very bullish,” said Andrew Tu, an executive at quant firm Efficient Frontier. “It is possible that we range between $17,500 and $18,300 for a bit. However, it seems likely in the coming days that we break the $18,300 resistance.” 

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Bitcoin spot trading on Bitstamp in November.
Source: TradingView

Constantin Kogan, a partner at Wave Financial, points to a $18,690-$18,950 “resistance” area where exchange books have a number of sell orders piled up, though he expects bitcoin to push above that soon. “I’m bullish, personally,” he told CoinDesk. 

Volumes were much higher than normal Wednesday, with major spot USD/BTC over $1.6 billion as of press time, surpassing this past month’s Nov. 5 high. 

volnov18

Spot BTC/USD volumes the past month.
Source: Shuai Hao/CoinDesk Research

“We’ve had a strong run up from $13,200, which was only a couple of weeks ago, and I think it’s now gunning for the all time high,” noted Rupert Douglas, head of institutional sales for crypto brokerage Koine. However, Douglas’ outlook mirrors Sir Isaac Newton’s famous dictum that what goes up must come back down. “At some stage we’re going to see a flush down to $13,000. The trend is up but it won’t be without volatility,” said Douglas.

The bitcoin derivatives market, which was nascent in the last major bull run, continues to see open interest rise. Bitcoin options on major venues, for example, are at over $4 billion as of press time, the highest they have ever been and a sign some smart money is looking to hedge away any risks volatility may – or may not – bring. 

skew_total_btc_options_open_interest-19

Bitcoin options open interest the past year.
Source: Skew

“Today’s active options market – which was nonexistent back in 2017 – is keeping any meteoric rises in check,” said Micah Erstling, a trader at firm GSR. 

Nevertheless, Erstling sees more money piling in because of crypto’s eye-popping performance so far in 2020. “Seasoned investors are finding it increasingly hard to argue with bitcoin’s performance – over 133% year-to-date, and up 100% over the last year.”

Ether options traders bet on 2.0

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Wednesday, trading around $472 and slipping 2% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: Ethereum Classic Gets DeFi Treatment With Wrapped ETC

The amount of open ether options for December expiration has surpassed 550,000 ETH, worth more than $260 million as of press time.

skew_eth_options_open_interest_by_expiry_k-6

Ether options open interest by expiration.
Source: Skew

Traders are likely taking bets about the future of Ethereum’s technical roadmap to “2.0”, an ambitious effort to insert staking and higher efficiency while porting over its native asset, ether.  

“Our theory is that this open interest pattern in ETH was strictly due to traders positioning themselves for an ETH 2.0 phase 0 launch, or yet another delay,” said Greg Magadini, chief executive officer of options data aggregator Genesis Volatility. “Even while BTC options had open concentrated in different expiration months, ETH consistently had open interest concentrated in December.”

Other markets

Digital assets on the CoinDesk 20 are mixed Wednesday, mostly red. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Read More: Zcash Undergoes First Halving as Major Upgrade Drops ‘Founders Reward’

  • Oil was up 0.69%. Price per barrel of West Texas Intermediate crude: $41.64.
  • Gold was in the red 0.51% and at $1,869 as of press time.
  • The 10-year U.S. Treasury bond yield climbed Wednesday jumping to 0.870 and in the green 1.5%.
coindesk20november

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