Market Wrap: Bitcoin Nears All-Time High As US House Passes $1.9T COVID-19 Relief

Market Wrap: Bitcoin Nears All-Time High As US House Passes $1.9T COVID-19 Relief

Bitcoin is within range of a quick run to the all-time high of $58,332.

  • Bitcoin (BTC) trading around $56,248.28 as of 21:00 UTC (4 p.m. ET). Climbing 3.54% over the previous 24 hours. 
  • Bitcoin’s 24-hour range: $53,101.24-$57,336.75 (CoinDesk 20)
  • BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.

Bitcoin gained for a sixth straight day, extending its longest winning streak of the year and approaching the record high price reached last month. 

The largest cryptocurrency was changing hands above $56,000, up about 3% on the day, and within range of a quick run to the all-time high of $58,332. 

“We continue to see strong upward momentum from technical,” Gary Pike, director of sales and trading at institutional cryptocurrency trading platform B2C2 USA, told Coin Desk. “One should not be surprised for bitcoin to test the old highs and potentially break through.”

The day’s gains came amid fresh evidence of two big bullish market drivers over the past year: Bitcoin’s increasing use as a hedge against inflation in the face of trillions of dollars of economic stimulus, and its increasing adoption by big institutional buyers. 

he U.S. House of Representatives on Wednesday passed a $1.9 trillion coronavirus relief bill, already passed by the Senate, that has been a priority of President Joe Biden’s early days in office. Some economists say the extra money could quickly reheat the economy, spurring a fast rebound in consumer demand and employment that might rapidly lead to price increases. 

Crypto analysts noted that the average “funding rates” on the bitcoin perpetuals – a fee traders pay for leverage within derivatives contracts – has started to tick back up  in an indication that markets are turning  more bullish, the Norwegian firm Arcane Research wrote Tuesday in a weekly report.

But that is still far from the unsustainable level the market saw in late February, which led to a correction due to liquidations of over-leveraged traders.

Trading volume on the spot market, meanwhile, was flat on Wednesday, showing the market has yet to return to the euphoric frenzy witnessed earlier in the year.  

“If we think about the volume as energy, and if the buyers only display low energy, then how can they keep advancing the price?” Chris Thomas, head of digital asset at Swiss quote Bank, said. “We really need another few [large buy orders] to move us all forward with more energy.”

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down on Wednesday, trading around $1,803.34 and sliding 1.56% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Ether’s futures open interest is near $6 billion on Wednesday, a 30% jump from last Friday, according to Jason Lau, chief operating officer at San Francisco-based crypto exchange OkCoin. The number is approaching its all-time high at about $7 billion, reached on Feb. 19.

At the same time, the amount of ether staked on Ethereum 2.0 has crossed the 3% threshold of total circulating coin supply, as CoinDesk reported earlier today, meaning 3% of all ether in existence will not be available for use other than staking on Eth 2.0 until sometime in the future.

While the excitement around Eth 2.0 and the Ethereum Improvement Proposal (EIP) 1559 has helped ether regain price strength from its recent price dip, for now ether is still largely moving in tandem with bitcoin, Lau said.

Other markets

Digital assets on the CoinDesk 20 are mostly in red Wednesday. The notable winner as of 21:00 UTC (4:00 p.m. ET): 

  • bitcoin cash (BCH) + 3.43%

Notable losers:

  • algorand (ALGO) – 6.61%
  • kyber network (KNC) – 6.15%
  • omg network (OMG) – 5.74%
  • cosmos (ATOM) – 5.55%

Equities:

  • Asia’s Nikkei 225 closed nearly flat, up 0.030%.
  • The FTSE 100 in Europe closed in the red 0.070%.
  • The S&P 500 in the United States closed in the green 0.60%.

Commodities:

  • Oil was up 1.20%. Price per barrel of West Texas Intermediate crude: $64.78.
  • Gold was in the green 0.54% and at $1724.62 as of press time.

Treasurys:

  • The 10-year U.S. Treasury bond yield fell Wednesday dipping to 1.523%.