Analysis

Bitcoin bounced close to $11,600 before retreating a bit while ether options traders are less active than they were in September.

  • Bitcoin (BTC) trading around $11,552 as of 20:00 UTC (4 p.m. ET). Gaining 1.7% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $11,186-$11,598
  • BTC is above its 10-day and 50-day moving averages, a bullish signal for market technicians.

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Bitcoin trading on Coinbase since Oct. 9.
Source: TradingView

After a flat weekend that saw the world’s oldest cryptocurrency stick to a tight $11,300-$11,400 range, bitcoin’s price jumped Monday as high as $11,598 before settling to $11,552 as of press time. 

Read More: Bitcoin and Ether Rally After Grayscale’s ETH Trust Becomes SEC-Reporting

In its weekly investor note, quant trading firm QCP Capital put bitcoin’s technical support at $10,500, with any point above positive for the overall market due to payments firm Square buying $50 million in bitcoin. It has stayed above that level comfortably since Oct. 2.

btcoct2020

Bitcoin trading on Coinbase since the start of October.
Source: TradingView

”Last week Square’s purchase put a nice floor in BTC right at the key trendline and 10,500 level, with their average purchase price being $10,617 for 4,709 BTC,” the QCP note read. “Square’s purchase and effective lobbying of other corporate treasury desks through their white paper will give people confidence that a five-digit BTC price will be sustainable.”

On the macroeconomic front, global stock markets are anxiously awaiting further economic stimulus in the face of an increasing number of coronavirus cases, said Rupert Douglas, head of institutional sales for broker Koine. Equities traders want another round of stimulus as well as a weaker dollar, which supports gold, silver and bitcoin, too, he added. 

Indeed, since Sept. 25, the U.S. Dollar Index, a measure of a basket of fiat currencies versus the greenback, has been flat, in the red 0.01% Monday at press time.

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The U.S .Dollar Index in 2020.
Source: TradingView

“Macroeconomic news and markets have been mostly positive across the globe, with equities up 2%-3% last week,” said Jason Lau, chief operating officer for cryptocurrency exchange OKCoin. He also noted that funding rates have been mostly positive the past three days, indicating traders are mostly paying for margin to go long in the bitcoin market.

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Funding rates on derivatives exchanges the past three days.
Source: Skew

“Positive funding rates in the BTC futures markets and recent large corporate purchases, for example Square, have also increased short term bullish sentiment in line with traditional markets leading into year end,” Lau added. 

Ether options open interest lower in October

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday trading around $387 and climbing 4% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Prices jumped nearly 4% several hours after digital currency asset manager Grayscale announced its Ethereum Trust has become a Securities and Exchange Commission (SEC)-reporting company. Grayscale is owned by CoinDesk’s parent company, Digital Currency Group

Read More: DeFi Project Aave Raises $25M From Blockchain.com and Other Investors

In the options market, after a record September for open interest on derivatives venue Deribit, October’s volume is much lower. In the first 10 days of September, ether options open interest averaged $425 million. For the first 10 days of October, that average was down 18% to $346 million.

skew_total_eth_options_open_interest-3-2

Ether open interest on top venue Deribit.
Source: Skew

Despite a mostly bullish run for ether to start October, options traders are less interested in placing bets on Deribit, which is the largest ether options venue. Vishal Shah, an options trader and founder of derivatives exchange Alpha5, says a decline in DeFi interest this month may be the culprit for open interest dipping. “I think, without over-analyzing it, DeFi has fizzled a touch, naturally reducing the need for ETH optionality on the margin,” he said.

Other markets

Digital assets on the CoinDesk 20 are mostly green Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

One notable loser as of 20:00 UTC (4:00 p.m. ET):

Read More: UK Crypto Derivatives Ban Seen Having Limited Effect on Small Market

Commodities:

  • Oil was down 2.6%. Price per barrel of West Texas Intermediate crude: $39.49.
  • Gold was in the red 0.32% and at $1,923 as of press time.

Treasurys:

  • U.S. Treasury bond yields were flat or slightly in the red Monday. Yields, which move in the opposite direction as price, were down most on the 10-year, dipping to 0.775 and slipping 0.63%.
https://www.coindesk.com/coindesk20

The CoinDesk 20: The Assets That Matter Most to the Market

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