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martedì 3 novembre 2020

Bitcoin Bounces From $13.2K; Ether on Centralized Exchanges at 2-Year Low

 Bitcoin opened the week recovering from a dip while ether balances on centralized exchanges fell.

  • Bitcoin (BTC) trading around $13,673 as of 21:00 UTC (4 p.m. ET). Slipping 1.2% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $13,221-$13,877
  • BTC above its 10-day but below the 50-day moving average, a sideways signal for market technicians.
bitcoinnov2
Bitcoin trading on Bitstamp since Oct. 31.
Source: TradingView

Bitcoin’s price dipped as low as $13,221 at around 12:00 UTC (7 a.m ET), according to CoinDesk 20 data. It subsequently rebounded up to $13,673 as of press time.

Read More: Bitcoin Revisits $13.5K After Posting Best Month Since April

“It’s interesting to see that today, as the S&P and gold price rose, BTC dropped in today’s market open,” said Andrew Tu of Efficient Frontier, a crypto quant trading firm. “In recent weeks, we have been seeing BTC price diverge from the equities market.” 

Bitcoin’s 90-day correlation, where zero means no mutual relationship, has been dropping since Oct. 18. 

btcspxcorr
Bitcoin’s 90-day correlation to the S&P 500 index in 2020.
Source: Shaui Hao/CoinDesk Research

“If this becomes a long-term trend, this could be a very positive sign for BTC should the equities market continue to correct over the medium to long run,” Tu added. Equities are faring quite well Tuesday, with major indexes were in positive territory.

However, the optimism in equities may not last. “Markets are likely to be unpredictable during the U.S. elections and any unexpected shocks to the system could cause the type of mass sell-off in traditional assets that has in the past brought digital assets down as well, though those dips tend to usually be only temporary,” cautioned Guy Hirsch, U.S. managing director of multi-asset brokerage firm eToro. 

Bitcoin volumes for Monday on major spot exchanges totaled $490 million as of press time, much higher than the past month’s average of $257 million and closing in on this past Monday’s $502 million total. 

monthlyvolumenov2
Major exchange USD/BTC volume the past month.
Source: Shuai Hao/CoinDesk Research

However, higher volume than this past month’s average is not translating into major price action Monday with an uncertain U.S. presidential election looming Tuesday, Nov. 3.

“This is the calm before the storm,” said David Lifchitz, chief investment officer of ExoAlpha. “Most investors remain prudent and don’t want to take a bet on an event whose outcome is binary: Will there be panic selling or a relief rally on Nov. 4?” 

Options traders see a 51% chance bitcoin is over $13,000, a 42% probability of the price of BTC over $14,000 and a 27% chance of surpassing $15,000 for November expiration. 

skew_probability_of_btc_being_above_x_per_maturity-9
Probability of BTC prices based on options for November expiration.
Source: Skew

Crypto could see some big movements once there is some clarity on the election and pent-up capital is unlocked, added Zachary Friedman, chief operation officer of trading firm Global Digital Assets. “Right now, pre-election, capital is staying sidelined in a wait-and-see fashion.”

Ether on exchanges drops

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Monday, trading around $387 and slipping 1.8% in 24 hours as of 21:00 UTC (4:00 p.m. ET). 

Read More: DeFi Trading App Dharma Now Connects Directly to US Bank Accounts

The amount of ether in reserve, or held by major centralized exchange addresses, a metric calculated by data aggregator CryptoQuant, has dropped to 11,628,046 ETH, a low not seen since Aug. 14, 2018. 

ethercentralex
Ether reserves in major exchanges addresses since 2018.
Source: CryptoQuant

One factor for the decline, according to Denis Vinokourov, head of research at digital asset prime broker Bequant, is the rise of decentralized exchanges, or DEXs, and the proliferation of liquid cryptocurrency pairs on those venues. 

liquiditynov2
Liquidity on Uniswap the past six months.
Source: Uniswap
https://www.coindesk.com/

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