Market Wrap: Bitcoin Stops Near $ 40,000 As Buyers Profit

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Bitcoin traded sideways on Thursday as buyers looked exhausted near the resistance level of $ 40,000. The cryptocurrency has risen around 23% over the past week, a gain due to improving sentiment and short coverage.

Some analysts expect bitcoin to remain limited to a range as the current rally takes a breather.

Our feeling is that the market will continue to look to trade in that $ 30,000 to $ 40,000 range in the near term, QCP Capital wrote in a Telegram chat. Until the Friday expiration at the end of the month, we expect $ 40,000- $ 42,000 to hold as open interest peaks here.

Latest prices

S&P 500: 4,419.1, + 0.42% Gold: $ 1,828.2, + 1.21% The 10-year Treasury yield closed at 1.273%, up from 1.233% on Wednesday

The price points to consider are the psychological price level of $ 40,000 and $ 44,000, which is the next level of resistance that BTC saw when Tesla announced that it would accept BTC as a payment in February, Jeffrey Wang, manager of the Americas at Amber Group, wrote in an email to CoinDesk.

In the bitcoin options market, there isn’t much open interest between the $ 45,000 and $ 50,000 strikes for the August expiration, wrote Pankaj Balani, CEO of Delta Exchange, in a report. -mail to CoinDesk. “We can see sudden movements here.”

Bitcoin is up around 35% year-to-date, double the S&P 500’s 17% gain over the same period. Bitcoin and stocks beat gold with a loss of 5% year-to-date.

The chart shows bitcoin, S&P 500 and gold returns since the start of the year.

Source: CoinDesk Research, St. Louis Fed, Yahoo Finance

Bitcoin open interest

Open interest in Bitcoin has also increased, surpassing its June highs and retesting support, Stack Funds, a Singapore-based crypto asset management company, wrote in a newsletter on Thursday. (See table below.)

Our expectations for retesting towards the mid / low region of $ 20,000 are less likely, Stack Funds wrote. The company mentioned that a clear break in open interest is needed in order to signal a further rise in bitcoin.

The chart shows the price of bitcoin and the open interest

Source: StackFunds

Risk management

Although bitcoin remains in a secular bull market, cryptocurrency has fallen by at least 25% once per calendar year since 2013, according to Panxora, a crypto investment firm.

Often this drop is on average over 40% and this type of withdrawal makes cryptocurrency a difficult investment for those who have no way of dealing with this type of volatility risk, Panxora wrote on its website. .

The graph shows the distribution of profits and losses of Bitcoin hedged versus unhedged.

Source: Panxora

When managing risk, crypto investors can take into account macroeconomic conditions such as economic growth and inflation, which tend to influence asset prices in traditional and crypto markets.

I think inflation fears will reappear, Gavin Smith, CEO of Panxora, said in an interview with CoinDesk. And I think that will be the catalyst for real change in cryptocurrency, certainly bitcoin over the next six to nine months.

From a longer term perspective, I’m pretty optimistic about the environment, because what we saw during the recession was really people moving away from the inflation rhetoric that we saw, Smith said. . Personally, I think it is too early to step away from it.

Smith said Panxora and other institutions he spoke to are entering the buying zone.

Even if they are long-term bullish on bitcoin, they expect these frequent sales, ”said Smith. “And then they use it to start building up their holdings, rather than chasing the market higher.

Altcoin balance sheet

Paxos Discloses More Investors: Paxos, a blockchain infrastructure provider, said Bank of America, the FTX crypto exchange, Founders Fund and Coinbase Ventures were among a list of prominent investors in its turn of $ 300 million Series D table, the company revealed Thursday. Oak HC / FT led the round, which the nine-year-old company announced in late April for a valuation of $ 2.4 billion. The tour also included PayPal Ventures and Mithril Capital, among others. The company has raised more than $ 540 million in multiple funding rounds. Traders are bearish on AXS: Even though AXS, Axie Infinity’s governance token, has recorded a cumulative price return of over 7,000%, compared to around 33% for bitcoin. return and the ethers return to 212%, some crypto traders are bearish towards the token. The euphoric herd mentality has taken the valuation to the extreme, and as with any overcrowded business, once the outcome is settled, price fluctuations will be extremely volatile, said Denis Vinokourov, head of research at Synergia Capital, a research firm. London-based quantitative financial management. CoinDesks Muyao Shen. The problem is, market timing is notoriously difficult. FET volatility: The price of the native Fetch.ais (FET) token has suffered a roller coaster ride for the past 24 hours after it was listed on the U.S. cryptocurrency exchange Coinbase on Wednesday. It is not uncommon for a coin to be listed on one of the most famous exchanges in the world. Often referred to as the Coinbase Effect, the phenomenon occurs when a cryptocurrency experiences a sharp rise in price before and after listing. After the listing, however, the price of cryptos tends to cool as speculative traders seek to profit from the hype surrounding the new crypto home. Ethereums Enterprise Play: As Ethereum celebrates its sixth anniversary, Joe Lubin, Ethereum co-founder and CEO of ConsenSys, says convergence between the public mainnet and enterprise versions of the technology is now closer than ever. Lubin, who spoke today at the Enterprise Ethereum Alliance (EEA) anniversary event alongside Ethereum Chief Scientist Vitalik Buterin and Web 3.0 leader and angel investor Balaji Srinivasan, noted that cryptocurrencies, decentralized finance (DeFi) and non-fungible tokens (NFT) were now entering pop culture.

Relevant news:

Other markets

Most digital assets on CoinDesk 20 ended up increasing on Thursday.

Notable 9:00 p.m. UTC (4:00 p.m. ET) winners:

bitcoin cash (BCH) + 4.38%

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