Market Wrap: Bitcoin Bounces to $11.8K as Ether Option Traders Go Bearish

Bitcoin is up Friday while ether options traders are overwhelmingly bearish.

• Bitcoin BTC$90,406.33 trading around $11,823 as of 20:00 UTC (4 p.m. ET). Gaining 2.4% over the previous 24 hours.
• Bitcoin’s 24-hour range: $11,517-$11,865
• BTC slightly above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin is back on the move Friday, breaking above $11,800 after a Thursday of relative quiet on the spot market.

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“Crypto has had a good run for about three weeks in a row, since late July,” said David Lifchitz, chief investment officer for quantitative trading firm ExoAlpha. “There is a current resistance level of $12,500 for bitcoin, which looks pretty normal as markets, even crypto, cannot go up in a straight line day after day.”

Indeed, over the past month, bitcoin reached a high of $12,130 before dipping. That signaled a retrenchment will be likely before a move to further highs in 2020, according to Lifchitz. “A slight pullback could be even in the cards in the next couple of weeks but without any special bearish event, this shouldn't be worrisome and the next major move from here should be up,” he added.

The bitcoin options market appears to agree with Lifchitz. Options with August 20 maturity show trader’s are giving bitcoin a 75% probability of being over $11,000, while only a 21% chance of hitting $13,000 by next Thursday, according to data aggregator Skew.

Traders may be temporarily distracted by more shiny objects at the moment. Alessandro Andreotti, an over-the-counter market cryptocurrency trader, says decentralized finance, or DeFi, is taking the spotlight from bitcoin – but that it won’t last. “Where I see opportunities right now is in DeFi tokens, which are performing incredibly well,” he told CoinDesk. “I feel the bulls will be coming back soon for bitcoin, though.”

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Ether options bearish

Ether ETH$3,122.92, the second-largest cryptocurrency by market capitalization, was up Friday trading around $442 and climbing 12.1% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

Read More: How DeFi ‘Degens’ Are Gaming Ethereum’s Money Legos

The ether options market has more open interest (open positions) than ever before, to the tune of $463 million on platforms Deribit and OKex, according to Skew. But that’s not necessarily bullish for ether. Trader sentiment appears to view ether’s valuation as unsustainable. An overwhelming number of options bets are on sub-$410 ether.

Chris Thomas, head of digital assets for Swissquote Bank, said some traders are probably concerned the current Ethereum-powered DeFi frenzy won’t be able to keep going for the rest of 2020. That contributes to the bearish sentiment. “Perhaps some traders are feeling that Ethereum has come too far this year,” he said. “With high gas fees, will it result in a problem for the DeFi ecosystem in the weeks ahead?”

Other markets

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

• tron (TRX) + 10.4%
• xrp (XRP) + 9.5%
• zcash ZEC$445.78 + 5%

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Notable losers as of 20:00 UTC (4:00 p.m. ET):

• chainlink LINK$13.84 - 7.4%
• tezos (XTY) - 4.7%

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Equities:

• In Asia the Nikkei 225 closed flat, in the green 0.17% as investors took profits amid uncertainty over U.S.-China relations.
• In Europe the FTSE 100 ended the day slipping 1.2% as poor Chinese economic data signaled a slower-than-expected recovery.
• The United States’ S&P 500 was flat, in the red 0.02% as tech stocks suffered losses while the travel sector made modest gains.

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Commodities:

• Oil is down 0.46%. Price per barrel of West Texas Intermediate crude: $42.14
• Gold was in the red 0.50% and at $1,942 as of press time.

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Treasurys:

• U.S. Treasury bonds were mixed Friday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 12.6%.

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