Market Wrap: Bitcoin Blasts Past $10,000; Ethereum Fees Up 550% in 2020 – CoinDesk
High spot bitcoin volume not seen since June is helping price while Ethereum’s DeFi expansion continues to include costly network fees.
Bitcoin (BTC) trading around $10,829 as of 20:00 UTC (4 p.m. ET). Gaining 9.7% over the previous 24 hours.
Bitcoin’s 24-hour range: $9,849-$10,964
BTC above 10-day and 50-day moving averages, a bullish signal for market technicians.
Bitcoin hit $10,964 on spot exchange Coinbase Monday, a price level not seen since August 2019. “The bitcoin breakout seemed to finally have happened as we lifted off from $9,800,” said Jack Tan, of Taiwan-based quantitative trading firm Kronos Research. “The trend is clear and we are headed higher.”
Bitcoin trading volume on Coinbase Monday was at $292 million. This was the highest since June 11, when volumes hit $255 million.
Traders have long discussed the $10,500 price range as a level to stay above to fuel a lengthy bull run, said Neil Van Huis, director of institutional trading at Chicago-based crypto liquidity provider Blockfills. “We need to stay over $10,500, so I would probably want to see a sharp interest in demand above that and to stay over it for more than 24 hours to see if the bullishness has legs,” Van Huis said.
Despite the excitement Monday, bitcoin’s jump might compel selling in the alternative cryptocurrency, or altcoin, market, said Kronos’ Tan. “Unfortunately, this might actually suck the energy out of the altcoins and high-flying DeFi tokens.”
One dynamic to watch: The ETH/BTC pair Monday is down 4% on Coinbase as traders are selling ether for bitcoin on the spot market.
Regardless of the rebalancing, Chris Thomas, head of digital assets for broker Swissquote, says DeFi is the main reason for the cryptocurrency markets’ move up overall. “It’s purely DeFi driven,” said Chris Thomas. “We will likely see a lot more of this, resulting in ether driving higher and pulling everything else with it.”
Ethereum fees jump 550% in 2020
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday trading around $323 and climbing 5.6% in 24 hours as of 20:00 UTC (4:00 p.m. ET).
In January, the average fee on the Ethereum network was 0.000542 ETH. So far in July, average fees on Ethereum are at 0.003532 ETH, a 550% increase in the cost to conduct transactions on the second-largest blockchain by market cap, according to data aggregator Blockchair.
“The recent rise of ether’s price could be explained by the fact that large users and investors in the DeFi ecosystem are buying ETH now in order to pay less gas fees for each transaction,” said Jean-Baptiste Pavageau partner at Paris-based quant firm ExoAlpha.
Some traders may be taking advantage of this rise in fees, stockpiling ether as the situation may only exacerbate as 2020 continues. “Speculators are actively monitoring the DeFi ecosystem and are anticipating growth of the Ethereum network over the coming months, increasing the demand in ether to pay for the gas fee of each transaction,” added Pavageau.
U.S. Treasury bonds were mixed Monday. Yields, which move in the opposite direction as price, were up most on the 10-year, in the green 3.2%.
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