Bitcoin’s price fell Monday on larger macroeconomic concerns while lower Ethereum fees benefit hardcore DeFi users.
Bitcoin’s price was riding high Monday, going up to $13,250 on spot exchanges like Bitstamp before dropping as low as $12,773 around 17:00 UTC (1 p.m. ET).
John Willock, CEO of crypto liquidity provider Tritum, said the bitcoin market can stay near its current price point, although some traders participated in profit-taking Monday.
“I think that it is possible to keep around $13,000 for the short term,” said Willock. “There will likely be some traders looking to close out longs from the recent run-up that might cause a minor retrenchment,” he added.
However, Consantin Kogan, a partner at crypto fund of funds BitBull Capital, said bitcoin had positive momentum going for it before its abrupt drop in price, and that more is to come. “We must take into account that a correction is already brewing,” he said.“I think it will happen this week.”
Major global stock indices are also down Monday amid COVID-19 uncertainty.
“When macro issues happen, it affects the entire market and not just one asset class,” said Andrew Tu, an executive at quant trading firm Efficient Frontier. “Hopes for stimulus are dimming while coronavirus cases are ticking upwards in America and around the world. This is causing countries to shut down things again, which will cause the economy to contract further.”
While bitcoin has dipped when equities slump of late, the bellwether of cryptocurrency has performed much, much better than stocks over the balance of 2020.
Despite the price drop Monday, the bitcoin derivatives market is still signaling bullishness, according to Cindy Leow, partner at multi-strategy crypto firm 256 Capital. “The market sentiment is starting to grow more exuberant with call options with a $50,000 strike by end of year being listed on Deribit, and futures are starting to heat up,” Leow said.
Indeed, funding rates on futures are still mostly positive on futures exchanges, which means long-oriented traders continue to pay for leverage liquidity to make bullish bets.
(ETH), the second-largest cryptocurrency by market capitalization, was down Monday trading around $391 and slipping 4% in 24 hours as of 20:00 UTC (4:00 p.m. ET).
On Saturday, Oct. 24, the average daily network fees on Ethereum hit 0.00223399 ETH, a low not seen since July 12 and beating . Ethereum network fees hit a 2020 high as recently as September, and a record .
Yield farmer “devops199fan”, a in decentralized finance, or DeFi, said he expects more positive expected volume, or EV, with fees dropping. “I actually think this is good for yield farming,” he told CoinDesk, “because it means more opportunities are positive EV since the fees are lower.”
Digital assets on the are mostly red Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET):