Bitcoin’s price quickly recovered after selling on Monday’s small market, approaching a new resistant level of $ 24,000 on Tuesday. Traders and analysts said this was because demand continued to rise despite a slight negative movement in the market.
- Bitcoin (BTC) is trading around $ 23,433.85 at 9:00 p.m. UTC (4:00 p.m. ET). 2.64% gain over the last 24 hours.
- 24-hour range of Bitcoin: $ 22,384.13 to $ 23,629.40 (CoinDesk 20)
- BTC above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.
There was little market reaction to Monday’s sharp drop to Tuesday’s rapid rally.
“The bitcoin market was heavily leveraged at the time and volatility increased sharply with the $ 20,000 breakout,” said Alex Kruger, macro-cryptocurrency analyst. A “move of $ 1,000 (~ 5%) under the current circumstances is pretty ordinary. Expect such price action to continue until leverage and [trading] volumes decrease. “
With most people already gone for the holidays, Bitcoin’s trading volumes on the top eight exchanges tracked in CoinDesk 20 have not declined since November.
It’s possible that Monday’s small price drop was seen as another great opportunity for many new and big players in the crypto space, traders and analysts told CoinDesk, and that partly led to the Bitcoin price picks up quickly on Tuesday. It is now approaching $ 24,000.
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“Regardless of the short term, the trend shows that the demand for bitcoin is increasing, especially by large players looking to enter the crypto market,” said Alessandro Andreotti, an over-the-counter crypto trader, who also said that $ 24,000 would be the next resistance level.
“If that was my opinion, the discharge was tied to macroeconomic fears related to the coronavirus,” Ryan Watkins, research analyst at Messari, told CoinDesk. “I think it’s pretty clear that the uptrend is intact and I expect the lows to be bought from now on. “
Another potential reason for recent volatility is the different attitudes towards bitcoin by investors in different parts of the world.
“European and US institutions are bullish, Asian retail investors are bearish,” Simons Chen, executive director of investments and transactions at Hong Kong-based crypto lender Babel Finance, told CoinDesk. “As a result, prices have remained volatile recently. But as traditional institutions continue to enter the market, a further rise in prices is only a matter of time.
Notably, the price of bitcoin has traded lower during trading hours in Asia, but has tended to rise since markets opened in the United States on Tuesday.
Bitcoin’s volatility has remained well above the volatility of the S&P 500 stock index and gold, and has increased since October, according to data compiled by CoinDesk.
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Ether follows Bitcoin’s positive trend
The second largest cryptocurrency by market cap, Ether (ETH), was up on Tuesday, trading around $ 626.26 and climbing 2.35% in 24 hours at 9:00 p.m. UTC (4:00 p.m. ET).
Like most other cryptocurrencies, the price of ether followed the rally in bitcoin, but it still significantly underperformed the oldest cryptocurrency.
Ether “just seems to be riding the pigtails of bitcoin,” said Vishal Shah, options trader and founder of the Alpha5 derivatives exchange. “All in all, the ether / bitcoin crossover continues to squeal in favor of bitcoin, and there is little reason to see this derailment. Ether could continue to underperform. “
Digital assets on CoinDesk 20 are mixed on Tuesday. Notable Winners at 9:00 p.m. UTC (4:00 p.m. ET):
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- Oil fell 2.19%. Price per barrel of West Texas Intermediate crude: $ 46.93.
- Gold was in the red 0.89% at $ 1,859.93 at the time of publication.
- The yield on 10-year US Treasuries fell to 0.92 and in the red to 0.05% on Tuesday.