Market Wrap: Bitcoin in Repair Mode as Traders Head to Miami; Dogecoin Gains

The cryptocurrency market is still recovering from last month’s volatile correction. Bitcoin was up about 4% over the past 24 hours as of press time and was holding support above $35,000. Technicals suggest limited upside towards $40,000 and $45,000 as resistance remains strong.

• Bitcoin (BTC) trading around $37,800 as of 21:00 UTC (4 p.m. ET). Gaining 4.25% over the previous 24 hours.
• Bitcoin’s 24-hour range: $35,805.21-$38,214.79 (CoinDesk 20)
• Ether (ETH) trading around $2,756 as of 21:00 UTC (4 p.m. ET). Gaining 8.82% over the previous 24 hours.
• Ether’s 24-hour range: $2,539.65-$2,802.82 (CoinDesk 20)

Traders were met with a mix of good and bad news heading into June. The bad: The U.S. Securities and Exchange Commission (SEC) chose last week to delay a decision on WisdomTree’s bitcoin ETF application. In late April, the SEC delayed a decision on VanEck’s bitcoin ETF application to at least June.

Delayed approval of a bitcoin ETF could leave traders searching elsewhere for signs of a directional pull. Bitcoin, ether and other larger cryptocurrencies have been stuck in relatively tighter ranges over the past few days, but some analysts remain hopeful that bullish sentiment will return.

Bitcoin goes to Miami

Some are looking to the Bitcoin 2021 in-person conference in Miami starting Thursday as a possible positive influence on price movement. This is similar to the so-called "CoinDesk Consensus Effect,” an unproven theory that crypto prices typically rally during or immediately after last week's annual conference.

Mati Greenspan, CEO of Quantum Economics, calls it the “Miami Effect.”

“The idea is that a gathering of several thousand people speed networking, sharing ideas and closing deals can be a boon for grassroots growth in the industry,” wrote Greenspan in a newsletter published on Wednesday.

Elsewhere, dogecoin (DOGE) continues to rally and is up about 20% over the past 24 hours at the time of writing.

Dogecoin howls at the moon

The rally in DOGE has taken center stage ever since Tuesday’s blog post by Coinbase saying traders on its Pro platform can begin trading the cryptocurrency as early as Thursday.

Dogecoin was trading at 41 cents at the time of writing, representing a 32% gain in the last 24 hours.

“People are still going to be cautious long term, but this debut will eventually have some ability to attract traditional investors and not just the Robinhood/Reddit army,” said Edward Moya, senior market analyst at Oanda.

“We’ve had consistent net buyers on dogecoin, which indicates the general bullishness around it as it gains popularity across all demographics,” said Voyager CEO Steve Ehrlich in an interview with CoinDesk.

However, some analysts see lack of fundamentals as a possible deterrent to DOGE’s rally. And technicals suggest limited further upside despite the short-term bounce.

Read the full story by CoinDesk’s Lyllah Ledesma here.

Volatile May leaves bitcoin rangebound

Over the past month, bitcoin suffered its third-worst monthly loss of about -35%, leaving analysts to wonder if sellers have fully capitulated.

Last month’s correction “performed slightly better than some of the most notable bear markets in history in 2012 and 2018, as you can see in the chart below,” wrote 21Shares, a Swiss based asset manager, in a newsletter published on Tuesday.

Meanwhile, fundamentals are improving, which suggests selling pressure could subside this month.

“We are witnessing fundamental buying pressure from long-term investors representing more than 50% of the investor base,” wrote 21Shares.

“Traders should look out for a confident move above $40K or a sell-off below $30K,” wrote Arcane Research in a newsletter published on Tuesday.

Blockchain activity declines

“Activity on the Bitcoin blockchain has declined sharply with the latest price correction, and the number of daily active addresses is now at the lowest level since November last year,” according to Arcane Research.

Historically, large drops in blockchain activity coincided with market tops similar to 2017 and 2019. The current drop in active bitcoin addresses suggests further downside for the cryptocurrency.

Ether is making a slight comeback

Ether has struggled to sustain moves above $2,800 over the past week as the corrective phase takes hold. However, the second-largest cryptocurrency by market value appears to be holding support relative to bitcoin.

ETH/BTC (the price of ether in bitcoin terms), shown below, is holding above the 50-day volume weighted moving average with resistance seen around 0.08.

Other markets

Digital assets on the CoinDesk 20 are mostly higher on Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

• algorand (ALGO) +15.24%
• polkadot (DOT) +16.18%

Commodities:

• Oil was up 1.40%. Price per barrel of West Texas Intermediate crude: $68.68.
• Gold was up 0.30% and at $1,910 as of press time.
• Silver is gaining, up 0.65% and changing hands at $28.20.

Treasurys:

• The 10-year U.S. Treasury bond yield fell Tuesday to 1.59%.