Market Wrap: Bitcoin All-Time High Expected, but Not Before a Pullback

Bullish sentiment continues to grow after bitcoin’s price broke above $57,000 on Monday. BTC is up about 3% over the past 24 hours, extending its outperformance compared to alternative cryptocurrencies.

Analysts see continued upside, with some calling for a return to the all-time high near $63,000 this quarter.

“The crypto rally is impressive since it occurred in the face of a broader risk-off environment in both equities and bonds, with crypto markets seemingly decoupling from the equities markets,” Coinbase wrote in a newsletter last week to institutional clients. “We are seeing BTC clearly lead this market up as evidenced by bitcoin dominance (BTC market cap relative to the total crypto market cap) reaching multi-month highs.”

The initial BTC spike last week could be the result of traders taking large positions ahead of a rumored approval by the U.S. Securities and Exchange Commission of a futures-based bitcoin exchange-traded fund (ETF), according to CoinDesk’s Lawrence Lewitinn.

For now, technicals suggest the current rally is due for a pullback. The recent uptrend appears to be exhausted, according to Katie Stockton, managing director of Fairlead Strategies. Stockton expects about two weeks of price consolidation toward $47,000-$48,000, which is where the September sell-off stabilized.

Latest prices

• Bitcoin BTC$90,840.39: $57,542, +3.9%
• Ether ETH$3,129.17: $3,527, +0.0%
• S&P 500: -0.6%
• Gold: $1,755, -0.1%
• 10-year Treasury yield closed at 1.612%

Bitcoin all-time high within reach

The options market is placing a 20% probability on bitcoin ending the month at a new all-time high above $65,000, according to data provided by Skew. BTC is currently about 10% below the all-time high of $64,863 reached on April 14.

Analysts expect further upside due to the resurgence of buying activity and seasonal strength in the fourth quarter.

“Today’s leg higher, after a dull weekend session, keeps the bullish technical pattern of higher lows and higher highs in place, pushing BTC toward the double top around $59,580 made in May,” Nick Cawley, strategist at DailyFX, wrote in an email to CoinDesk.

A break above $59,000 could place bitcoin closer to the all-time high, so long as the downside remains limited around $53,000, according to Cawley.

Crypto funds see inflows

Crypto-focused funds took in more than double the amount of new money last week than they did the prior week as bullish sentiment returned to the bitcoin market, reported CoinDesk’s Lyllah Ledesma.

The jump was largely driven by bitcoin-focused funds, where inflows rose to $225 million, the highest in five months, according to a report Monday from digital asset manager CoinShares.

However, Ethereum-focused funds, which had gained in recent months as bitcoin funds were mostly flat to down, saw minor outflows last week, totaling $14 million. Funds focused on alternative blockchains Litecoin, Ripple and Polkadot also saw outflows last week.

Altcoin roundup

• FTX.US launches collectibles arm in boost to Solana-based NFTs: The U.S. wing of Sam Bankman-Fried’s crypto empire said its new marketplace, FTX NFTs, will allow users to trade, mint, auction and authenticate Solana-based non-fungible tokens (NFT), reported CoinDesk’s Danny Nelson. The exchange’s prioritization of Solana highlights two realities: Bankman-Fried is heavily invested in the Solana ecosystem; and that ecosystem, while host to a handful of so-called “blue-chip” projects, doesn’t yet have a juggernaut marketplace for NFT trading. FTX.US says its new platform will charge 2%.
• Celo appoints former Facebook, Bank of America execs to board: Blockchain payments startup Celo appointed former Facebook executive Morgan Beller to its board alongside Jai Ramaswamy, who has previously worked at Bank of America, reported CoinDesk’s Jamie Crawley. Beller is the former head of strategy at Calibra, the Facebook subsidiary set up to develop the wallet for the social media giant’s cryptocurrency project Libra (later Diem). Ramaswamy is the chief risk and compliance officer of cLabs, the company behind the building of the Celo blockchain.
• DeFi perpetuals exchange Futureswap launches new version: Futureswap raised $12 million in venture funding from Framework Ventures, Ribbit Capital and Placeholder.vc to launch an updated version of its Ethereum-based exchange, reported CoinDesk’s Helene Braun. The protocol, which taps into version 3 (v3) of leading automated market maker (AMM) Uniswap, enables leverage of up to 30 times on any liquidity pool. “We’re super-excited to add this layer as a new primitive,” CEO and co-founder Derek Alia told CoinDesk in an interview. “The amount of possibilities now are very, very cool.”

Relevant mews

• Coinbase Co-Founder’s Venture Firm Raising $1.5B Fund, Document Shows
• Private Office of UAE Sheikh Launches $100M Blockchain Investment Fund
• Airdrop Ethics: VC Firm Draws Ire Following $2.5M Ribbon Finance Exploit
• Dying for a Bitcoin Futures ETF? Watch Out for ‘Contango Bleed’

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

• Bitcoin BTC$90,840.39, +3.9%
• Filecoin FIL$1.5082, +0.3%

Notable losers:

• ALGO$0.1344, -6.4%
• DOT$2.1392, -5.6%