Price Point: Bitcoin was rising for a third straight day, nearing $11K.
Market Moves: Bitcoin balances on exchanges have fallen to a 2-year low, seen as a bullish sign that traders are holding for the long term or tokenizing the digital assets for use in decentralized finance, or DeFi.
Bitcoin Watch: Price-chart patterns suggest bitcoin's latest rally might be running out of steam, CoinDesk's Omkar Godbole writes.
What's Hot: Singapore's KuCoin hit by $150M hack, Bahamas targets mid-October for digital "sand dollar" release, Uniswap passes $2B collateral milestone, Bitwise fund doubles to $9M.
PRICE POINT
Bitcoin was rising for a third straight day, pushing back toward the upper end of the $10,000-$11,000 range where the largest cryptocurrency has traded for most of September.
In traditional markets on Monday, European stocks rose and U.S. equity futures pointed toward a higher open, with a Nordea Investment Funds macro strategist telling Bloomberg News that "there is a tremendous amount of liquidity and it will continue to help the global economy." Gold was 0.3% lower at $1,859 an ounce.
"The world has morphed into one big macro trade," the cryptocurrency analysis firm Delphi Digital wrote late Friday in a report.
MARKET MOVES
There's a degree of transparency in cryptocurrencies that doesn't exist in traditional markets like stocks and bonds: Thanks to data that's easily extracted from blockchains, everyone can see everyone else moving their money around.
That means traders can keep an eye on exchange wallets to gauge whether investors and crypto miners are getting their bitcoin into position for a possible sale — or taking balances down from the exchanges in anticipation of holding for the longer term.
The latter might be what's happening now, CoinDesk's Muyao Shen reported Monday. Total balances of bitcoin on major exchanges has hit its lowest levels since November 2018. It could be an indication of bullishness among bitcoin traders.
“There’s no reason to sell now," Mike Alfred, CEO of Digital Assets Data, told Shen in a phone interview. “Why would you be selling when you’re at the beginning of a wave of potential corporate treasuries and institutional investors coming in?”
Another interpretation, according to Arcane Research, is that traders are taking their bitcoin off exchanges to deploy them in the decentralized finance sector, known as DeFi. Juicy returns can be obtained from tokenizing crypto assets and depositing them as collateral in semi-automated, blockchain-based trading and lending platforms.
As CoinDesk reported earlier this week, tokenized bitcoin has become one of the largest assets on DeFi. Currently, there are more than 108,000 BTC worth some $1.1 billion minted from seven issuers, according to Dune Analytics.
That might be another bullish sign.
"Bitcoin maximalists would decry the use of bitcoin on Ethereum, arguing that it isn’t 'real' bitcoin," David Derhy, an analyst for the cryptocurrency trading platform eToro, wrote Monday in an email. "I view this development as positive for the sector, as it highlights an evolution within the industry."
Whatever the case, it's all there to see. Bitcoin balances on all exchanges have fallen to the lowest since 2018. (CoinDesk)
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Bitcoin's weekly price chart shows that the MACD histogram has just tipped negative. (TradingView)
Bitcoin's upward momentum is again running out of steam near the psychological resistance of $11,000.
The cryptocurrency clocked highs near $10,950 early Monday and is currently trading near $10,850.
The cryptocurrency's weekly chart MACD histogram, an indicator used to identify trend changes and trend strength, has dipped below zero for the first time since March, indicating a bearish shift in the broader trend.
Similarly, the 5- and 10-week averages have produced a bearish crossover. As such, bitcoin could face chart-driven selling pressure.
On the higher side, $11,000 is the level to beat for the bulls.
- Omkar Godbole
TOKEN WATCH
Bitcoin (BTC): Market cap could swell to $1-5T in next 5-10 years, from about $200B now, as largest cryptocurrency becomes settlement system for banks and businesses while taking 10% share of physical gold market, Coin Metrics says in report with ARK Invest.
Bitcoin: (BTC): Largest cryptocurrency breaks record for longest streak of days above $10K, now at 63 days.
Uniswap (UNI): Uniswap is now bigger than the entire decentralized finance space just two months ago, as trading protocol becomes first to pass $2B milestone.
Uniswap (UNI), Balancer (BAL), Curve (CRV): Gemini lists DeFi tokens following Binance, Huobi and OKEx in succumbing to FOMO.
Imagination has always been a key part of what money is. That piece of paper in your wallet only has value because the payer and the payee have both invested belief in its value. The crypto community -- and its many competing sub-communities -- create that common meaning with their preferred form of money.
We've launched a new podcast to explore these ideas and the technological, political and social forces reshaping our financial system.
Listen to the Money Reimaginedpodcast, hosted by our Chief Content Officer and author of CoinDesk's Money Reimagined newsletter Michael Casey and Sheila Warren of the World Economic Forum, on Fridays at 10 a.m. ET.
Universities are often key to getting new industries off the ground, providing the infrastructure to take paradigm-shifting ideas to the next level. But in blockchain and digital finance technology, how do they measure up?
Introducing CoinDesk U, a ranking of the top 20 schools identified in our research in collaboration with Mousebelt.
During a special CoinDesk Live episode on Oct. 6, we will release the results of the first CoinDesk U ranking. We are inviting students from around the U.S. as well as representatives from student club networks, the crypto industry and leading institutions to discuss traditional academia’s relevance and support for the financial technology poised to fuel Web 3.0.
CoinDesk Research continues its webinar series on Bitcoin's fundamental metrics with two episodes on UTXO-based analyses.
UTXOs, or unspent transaction outputs, are fundamental components of Bitcoin's distributed ledger that can shed startling light on investors' behavior and positions.
On Sept. 29 at 10:30 a.m. ET, Lucas Nuzzi from Coin Metrics will present charts and insights on the market-value-to-realized-value (MVRV) ratio and the spent output profit ratio (SOPR).
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
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First Mover: Bitcoin Low Exchange Balances Looks Bullish, But Chart Looks Bearish as $11K Nears