Market Wrap: Ether Sets New Highs as Bitcoin Stays Below $49K

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Written by SciTechNerds

February 13, 2021

Market Wrap: Ether Sets New Highs as Bitcoin Stays Below $49K

The price of bitcoin struggled to regain $49,000 Friday, continuing to bounce between $48,000 and $46,000 heading into the weekend. As bitcoin contemplated which way to go, ether made a brand new all-time high above $1,850.

A lot of bitcoin’s choppy price action might be attributed to futures deleveraging as keen bulls piled into long trades anticipating a swift breakout to $50,000 or higher. Funding rates for perpetual bitcoin futures have steadily elevated through February, in response to market data collected by Skew, with some funding rates reaching their highest levels in the past 12 months.

High positive funding rates signal a rise in long positions, whereas negative rates point out a extra bearish sentiment. The market tends to reset when traders, particularly in overcrowded derivatives positions, grow to be overly bearish or bullish.

In the past 24 hours, over $330 million worth of bitcoin futures contracts had been liquidated, in response to market data from Bybt. A lot of the liquidated positions had been longs.

Regardless of the choppy price action, information over the previous few days has been extraordinarily bullish for the main cryptocurrency. In a single week, Tesla purchased $1.5 billion worth of bitcoin, Twitter’s CFO said the company is contemplating investing in the cryptocurrency, BNY Mellon announced plans to custody bitcoin for its clients, and PayPal confirmed its plans so as to add crypto to its Venmo product.

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Friday buying and selling around $1,850 and climbing 3% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

As it set new record highs above $1,850, other decentralized finance-related (DeFi) cryptocurrencies adopted suit, with some even outperforming ether. The DeFi sector in aggregate rallied over 5% in the past 24 hours, in response to Messari, led by Uniswap, yearn.finance and others, which gained by double-digit percentages.

Ether’s recent highs come the identical week the CME launched its ether futures market, which some traders anticipated would be a bearish catalyst for the market. The expectations had been virtually exclusively pinned to the ominous timing of bitcoin’s peak in 2017 close to the launch of CME’s bitcoin futures market. But, thus far the bearish thesis has not played out.

Since CME’s futures launch, ether has rallied over 12%. The product has had a quiet start, with less than $200 million worth of contracts traded this week. In contrast, Binance’s ether futures have traded almost $40 billion worth this week.

Digital assets on the CoinDesk 20 are primarily green Friday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

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