Market Wrap: Bitcoin Rallies As Crypto Holders Accumulate
By Damanick Dantes, Angelique Chen
Crypto prices are rising after the Luna Foundation Guard purchased $1 billion worth of BTC.
Bitcoin’s 24-hour price chart (CoinDesk)
The world’s largest cryptocurrency by market capitalization is up 15% over the past week, compared with a 16% rise in ether (ETH) and a 25% rise in Solana’s SOL token over the same period. The rally in alternative cryptocurrencies (altcoins) relative to BTC reflects a greater appetite for risk among crypto investors.
Meanwhile, the S&P 500 was roughly flat Monday, versus a 6% rise in BTC over the past 24 hours. That suggests the recent rally in bitcoin can be explained by new token accumulation, which is unique to the crypto market.
Over the past six days, the Luna Foundation Guard’s (LFG) bitcoin wallet address purchased more than 27,000 BTC worth roughly $1.3 billion. The foundation is delivering on its month-old promise to add BTC as an additional layer of security for UST, which is Terra’s decentralized dollar-pegged stablecoin.
Do Kwon, the foundation’s director, confirmed the address to Bitcoin Magazine in an email, which was also marked by OKLink, a blockchain information website.
There appears to be a synergy between bitcoin and the Terra ecosystem, according to Lucas Outumuro, head of research at IntoTheBlock, a crypto data company. “UST benefits from having additional backing and bitcoin benefits not just from the buying pressure, but also from having a stable medium of exchange backed by BTC,” Outumuro wrote in an email to CoinDesk.
●Bitcoin (BTC): $48,010, +6.84%
●Ether (ETH): $3,412, +7.22%
●S&P 500 daily close: $4,576, +0.71%
●Gold: $1,919 per troy ounce, −1.78%
●Ten-year Treasury yield daily close: 2.48%
Spot driven move
Bitcoin’s recent price bounce appears to be driven by demand in the spot market, which typically occurs around market turning points.
The chart below shows the rise in spot BTC volume versus futures volume, which has settled at around average levels over the past week.
In the futures market, open interest is rising and funding rates are slightly positive (at a one-week high). That indicates an increase in trading activity, albeit with weak conviction among BTC buyers.
Bitcoin’s spot volume versus futures volume (Glassnode, Swissblock Technologies)
The chart below shows an uptick in bitcoin trading volume across major exchanges, according to CoinDesk data. Prior volume spikes occurred during market sell-offs, which signaled capitulation among sellers.
At this stage, an increase in buy volume versus sell volume could determine if the price rally has staying power. Data from CryptoQuant shows a slight increase in the buy/sell volume ratio over the past week, which indicates bullish sentiment among bitcoin traders.
Bitcoin’s trading volume (CoinDesk, CryptoCompare)
Shiba Inu, Solana tokens lead gains with bitcoin: Major cryptocurrencies displayed gains after over two weeks of staying flat. Solana’s SOL jumped as much as 14%, with similar gains seen with Shiba Inu’s SHIB and Polkadot’s DOT tokens. A jump in SOL prices made it costly for traders betting against higher prices of the asset. Data shows nearly $30 million in liquidations occurred on SOL-tracked futures, according to CoinDesk’s Shaurya Malwa.
NFTs could go mainstream with Instagram’s planned support: Bringing non-fungible-tokens to Instagram’s large audience has the potential to supercharge the overall market going mainstream, Deutsche Bank said in a research report on Sunday. Instagram will simplify the process of buying and selling NFTs, thereby lowering the barriers to entry, the bank said, adding that the platform’s strong global brand recognition will “lend itself to legitimatize NFTs, which could serve to erode buying hesitancy across the company’s broader audience,” analysts wrote, according to CoinDesk’s Will Canny.
BAYC’s ApeCoin jumps 13%, causes $4.5M in futures liquidations: Traders of futures tracking ApeCoin (APE) lost over $4.5 million in the past 24 hours as prices surged by 13% amid a broader market jump, data from tracking took Coinglass shows. Some 66% of all APE futures traders were short, or betting against higher prices for the recently issued token. These accounted for $2.8 million of all losses, while $1.4 million in gains were for traders who were long, or betting on higher prices, according to CoinDesk’s Shaurya Malwa.
Digital assets in the CoinDesk 20 ended the day higher.
|EOS||EOS||+14.7%||Smart Contract Platform|
|Cardano||ADA||+7.9%||Smart Contract Platform|
There are no losers in CoinDesk 20 today.
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