Bitcoin is trending upward and volume on decentralized exchange Uniswap is soaring to an astounding new high.
- Bitcoin (BTC) trading around $11,724 as of 20:00 UTC (4 p.m. ET). Gaining 0.61% over the previous 24 hours.
- Bitcoin’s 24-hour range: $11,575-$11,784
- BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
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Bitcoin jumped as high as $11,784 on spot exchanges like Coinbase on Monday. Adding fuel to the fire was the derivatives market; short sellers were liquidated on BitMEX during bitcoin’s rise Monday. In one hour, $6.6 million in buy positions were automatically triggered, the crypto equivalent of a margin call for traders going short.
The Federal Reserve’s decision to let inflation run while keeping interest rates low is helping boost crypto, Darius Sit, managing partner of QCP Capital, told CoinDesk.
“The market was looking to the Powell speech to see if there'd be any hawkish indications – clear plans to end liquidity injection and cheap money,” Sit said. “There was no sign of hawkishness so the party has resumed.”
Sit noted the continued decline of the U.S. Dollar Index, which measures the greenback versus a basket of global currencies. The index continues to drop, down 0.12% Monday and hitting fresh lows for 2020.
Crypto stakeholders are watching the equities market. Rather than a hedge, some still consider bitcoin a “risk-off” asset whereby traders will unload BTC if the broader stock market dumps.
“The S&P has been up almost 8% in the month of August so it will be interesting to see what bitcoin does when the market pulls back,” said Michael Rabkin, head of institutional sales at crypto liquidity provider DV Chain. “With bitcoin still being a fairly newer asset, there is a risk that it can sell off when the market does,“ he said.
Traders continue to have a plethora of opportunities in the crypto market, and decentralized finance, or DeFi, continues to captivate many, said John Willock, CEO of digital asset liquidity firm Tritum.
“The big run over the weekend was highly concentrated in DeFI assets built on top of the Ethereum network, such as YFI and COMP,” Willock said. “This looks like a perfect storm of high optimism for these protocols and recent innovations introduced that are proving they have long-term value.”
Uniswap crosses $500M in daily trading
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday, trading around $437 and climbing 3% in 24 hours as of 20:00 UTC (4:00 p.m. ET).
The daily volume of decentralized exchange Uniswap hit $560 million Sunday. Uniswap’s daily trading volume is surpassing centralized exchanges such as Coinbase, which had $433 million the past 24 hours. Uniswap has over $10 billion total volume traded, according to Dune Analytics.
“I think there is no denying that DeFi is a thing,” said George Clayton, managing partner at Cryptanalysis Capital. “Traders are spending over $400,000 per day in gas fees on Uniswap alone,” he added.
However, there continues to be a caveat with all of this DeFi frenzy, added Clayton – the Ethereum network needs to scale in order to successfully meet this increasing demand. “Maybe centralized exchanges' days really are numbered,” he said. “But not until the scaling issue is solved. Maybe Cosmos can do it with an Ethereum bridge.”
Other markets
Digital assets on the CoinDesk 20 are mixed on Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET):
Notable losers as of 20:00 UTC (4:00 p.m. ET):
Equities:
- In Asia the Nikkei 225 ended the day up 1.1% as Warren Buffett announced Berkshire Hathaway purchased 5% of each of the top five Japanese conglomerates.
- In Europe, U.K. trading was on holiday. Germany’s DAX index closed in the red 0.61% as investors were cautious due to coronavirus surpassing 25 million cases globally.
- The United States’ S&P 500 lost 0.22% as bank stocks dragged the index lower due to lower yields in the Treasury market.
Commodities:
- Oil is down 0.26%. Price per barrel of West Texas Intermediate crude: $42.80.
- Gold was in the green 0.28% and at $1,969 as of press time.
Treasurys:
- U.S. Treasury bond yields slipped Monday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 3%.