1. Market Wrap: ‘Oversold’ Bitcoin Down to $35K, ETH Drops to $2.5K
The past weekend saw the lowest number of bitcoin transfers from exchanges in 2021.
Investors have been selling bitcoin for the past week, according to on-chain data. Meanwhile, ether’s daily trading volumes have consistently outpaced BTC’s.
Bitcoin (BTC) trading around $35,987 as of 21:00 UTC (4 p.m. ET). In the red 2.5% over the previous 24 hours.
Bitcoin’s 24-hour range: $35,754-$37,833
Ether (ETH) trading around $2,549 as of 21:00 UTC (4 p.m. ET). Losing 3.2% over the previous 24 hours.
Ether’s 24-hour range: $2,532-$2,734
Bearish bitcoin signal
Bitcoin’s hourly price chart on Bitstamp since May 29.
Bitcoin, the world’s largest cryptocurrency by market capitalization, was below the 10-hour moving average and the 50-hour as the two indicators are closing in on each other, a bearish signal for market technicians.
BTC’s price slid from $37,833 at 01:00 UTC (9 p.m. ET Monday) to as low as $35,816 by 17:15 UTC (1:15 p.m. ET) Tuesday, a 5.3% tumble based on data, before rising to $35,987 as of press time.
“Bitcoin is newly oversold from an intermediate-term perspective,” said technical analyst Katie Stockton in her weekly Fairlead Strategies investor note.
Oversold BTC conditions
The past weekend saw the lowest number of bitcoin transfers from exchanges in 2021. On Sunday, May 30, the flow bottomed out at 33,393 daily transfers, according to data aggregator Glassnode. It’s the first time this year fewer than 35,000 transfers were made from exchanges in a day.
In contrast is the high transfer volume to exchanges in the past month, particularly on May 19, when each transaction that day averaged 2 BTC. That’s triple the daily average per transaction of 0.67 BTC so far in 2021.
This Glassnode on-chain information supports Stockton’s oversold theory in the bitcoin market because it appears holders moved BTC to exchanges and sold it, leading to a record-low outflow Sunday.
2. Coinbase Lists Dogecoin on Professional Trading Platform
The exchange typically adds cryptocurrencies to its retail platform a few weeks after first listing on the professional version.
Coinbase’s professional trading platform is adding the meme-inspired cryptocurrency dogecoin (DOGE, +6.44%), the exchange announced Tuesday.
Coinbase Pro said in a blog post that users could transfer DOGE into their professional trading accounts, with trading expected to launch on Thursday “if liquidity conditions are met.”
While the blog post did not announce whether Coinbase would add the cryptocurrency to its retail trading platform and mobile app, the publicly traded crypto exchange typically adds cryptocurrencies to its retail platform a few weeks after first listing on the professional version.
“Starting immediately, we will begin accepting inbound transfers of DOGE to Coinbase Pro. Trading will begin on or after 9 a.m. Pacific Time (PT) [on] Thursday, June 3, if liquidity conditions are met,” Tuesday’s blog post said.
Coinbase CEO Brian Armstrong first announced the exchange would list DOGE during an earnings call last month.
Dogecoin’s price spiked appears to have spiked on the announcement, trading at about 34 cents as of press time.
3. Crypto Derivatives Firm Hxro Raises $15M From Macro Hedge Fund Commonwealth
The CIO of the Alan Howard-backed hedge fund said a liquid options market is the next step in decentralized crypto trading.
Crypto derivatives firm Hxro (pronounced “hero”) has raised $15 million in a token sale from hedge fund manager Commonwealth Asset Management.
The investment is the largest single investor fundraiser that the firm has had to date. It comes in the wake of Hrxo Network, a decentralized protocol built on Solana that offers permissionless access to liquidity on options markets.
Commonwealth is a global macro and real estate-focused hedge fund that includes veteran investors like Louis Bacon and Alan Howard. Commonwealth Chief Investment Officer Adam Fisher said the fund chose to invest because of Hxro’s plans to generate liquidity and a stronger market structure in the decentralized options market.
“When volatility expands and the liquidity backs away, market participants who need to adjust their position are pretty much unable to do something,” said Dan Gunsberg, co-founder and CEO of Hxro, adding:
“It’s one thing to get large retail players into the market, but for macro funds or large hedge funds the need to hedge and the need to take position in options is greater than ever.”
4. Coinbase Debit Card Now Works With Apple Pay
The integration brings the crypto exchange’s rewards-heavy spending tool to the iPhones of U.S. users.
Coinbase’s Visa debit card will sync with Apple Pay and Google Pay, the crypto exchange said Tuesday.
Additionally, Coinbase said in a blog post it will begin offering cash-back spending reward features to waitlisters this week. The card is available across the U.S. (with the exception of Hawaii); a variation rolled out in European markets in 2019.
The debit card works by converting users’ cryptocurrency balances, such as bitcoin (BTC, -4.25%), to fiat at point of sale, allowing them to essentially pay with crypto at any card-accepting merchant. Notably, it promises 4% rewards in stellar (XLM, -0.65%) and 1% in bitcoin. Most debit cards don’t have a cash-back program, let alone one in crypto.
5. Bitcoin’s Long-Term Put Options See Sustained Demand as Price Consolidates
The options market is flashing signs of concern about an extended price sell-off.
Bitcoin’s longer-term puts, or bearish bets, are drawing stronger demand than calls for the first time this year, a sign the recent sell-off has taken a toll on market confidence.
According to data provider Skew, the six-month put-call skew, which measures the relative expensiveness of puts and calls, crossed above zero on May 17, indicating a bias for puts.
The metric has remained positive ever since, and was hovering at 4% at press time. That’s the longest stretch above zero in at least a year.
“Longer-term bitcoin options [skew] are seeing sustained prints above zero for the first time this year, indicating demand for puts,” Fredrick Collins, an options trader and researcher at Glassnode, tweeted Monday. “Before this, bitcoin was the only major asset besides gold and Japanese yen to consistently trade with a more expensive upside.”
A call option gives the purchaser the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a specific date. A put buyer gets the right to sell.
While bitcoin had several price pullbacks in the 10 months to April 2021, the six-month put-call skew remained entrenched in negative territory in a sign market participants were confident the declines would be short-lived and lead to more substantial rallies. They were right and the cryptocurrency rose to record highs after every pullback.
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June 2, 2021