Market Wrap: Bullish Traders Push Bitcoin Over $9,100, Returning to Halving Levels

The price of bitcoin (BTC) shot above $9,100 Wednesday in high-volume buying at around 10:00 UTC (6 a.m. ET) thanks to traders feeling optimistic about the crypto markets. 

As of 20:40 UTC (4:40 p.m. ET), bitcoin was trading at $9,162, gaining 3.5% over the previous 24 hours. Trading seems to support a higher upward climb as bitcoin’s price is now above its 10-day and 50-day moving averages, a signal of bullish sentiment.

Bitcoin trading on Coinbase since May 25
Source: TradingView

The question for the market is whether bitcoin’s price can continue to rise after Tuesday’s struggle to stay at $9,000. Traders like to talk about the $10,000 level as some kind of barrier to blow through that will result in new highs, but bitcoin hasn’t been able to push past that number since hitting it for a short time on May 7

“Bulls seem unable to break the $10,000 psychological support for some time since the halving,” said Peter Chen, a cryptocurrency trader at Hong Kong-based OneBitQuant.

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Bitcoin trading on Coinbase in May
Source: TradingView

Some are more optimistic. “Bitcoin must shine over the next 18 months, and I think it will. The short-term technical picture is not bad. Bitcoin is trading around where it was at the halving,” said George Clayton, managing partner at New York-based Cryptanalysis Capital. 

Read More: Number of Bitcoins on Crypto Exchanges Hits 18-Month Low

Bitcoin was as high as $9,184 on exchanges like Coinbase on May 11, the date of the network’s reward reduction event that happens every four years. During that recent halving miners’ rewards for successfully adding a block to the Bitcoin blockchain were cut 50% from 12.5 to 6.25 BTC. 

Elie Le Rest, a partner at France-based quantitative firm ExoAlpha, says the lower prices seen in the past few weeks were a bit of a post-halving slump. “We have witnessed the hashrate taking a breather and blocks taking longer to be mined immediately post-halving, which might explain some lack of enthusiasm,” Le Rest said. When looking at bitcoin price overlaid with the hashrate, price has stayed steady since the halving.

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Hashpower and bitcoin price the past three months – dotted line is halving event
Source: Skew

Le Rest senses the post-halving hangover might continue, telling CoinDesk he expects record-setting bitcoin prices in the longer term. “We could be in for a correction in the short term before perhaps a bounce taking bitcoin to a new high in 2021,” Le Rest said. 

40,000 BTC in options expiring Friday

Meanwhile, the bitcoin options market has an event coming up this week, Singapore-based trading firm QCP Capital wrote in a recent market update. “Keep an eye out this Friday as over 40,000 BTC worth of options will be expiring,” the firm noted. 

Read More: Bitcoin Demand Pushes Tether Below $1 for Longest Stretch Since March

As quantitative traders seeking to capture value in crypto volatility, QCP predicts more rocky price movements ahead. In fact, bitcoin’s at-the-money implied volatility, a measure of price movements, has dipped recently, according to data from aggregator Skew.

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Bitcoin volatility in options over the past month

“We don’t see any particular catalyst for volatility, but with the futures basis drifting lower again and USDT [U.S. dollar-based tether stablecoins] back in prolonged discount territory, first time since mid-March, something might be brewing,” QCP noted. 

Other markets

Digital assets on CoinDesk’s big board are all in the green Wednesday. The second-largest cryptocurrency by market capitalization, ether (ETH), gained 3% in 24 hours as of 20:40 UTC (4:40 p.m. EDT). 

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Ether trading on Coinbase since May 25
Source: TradingView

Cryptocurrency winners on the day include cardano (ADA) up 3.5%, litecoin (LTC) climbing 3% and monero (XMR) in the green 2.8%. All price changes were as of 20:40 UTC (4:40 p.m. EDT) Wednesday.

Read More: EOS Has Still to Prove Itself After Spiraling Down This Past Year

In the commodities sector, oil experienced a drop, down 6.6% with a barrel of crude at $31.89 as of press time. 

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Contracts-for-difference on oil since May 25
Source: TradingView

Gold traded flat on the day, with the yellow metal closing $1,712 at the end of New York’s trading day. 

As for equities, In the United States, the S&P 500 index was up 1.5%. U.S. Treasury bonds were mixed. Yields, which move in the opposite direction as price, were up most on the 2-year, in the green 5.6%

The FTSE Eurotop index of companies traded flat on the day Wednesday, up less than a percent. 

Read More: Slipping Yuan May Be Good for Bitcoin Price, Past Data Suggests

In Asia, the Nikkei 225 index of large companies in Japan also closed the day flat, up less than a percent but in the green 4% on the week on fresh stimulus plans by the government.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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