Bitcoin's Supply Squeeze

The latest moves in crypto markets, in context

Edited by Omkar Godbole

November 9, 2021

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Bitcoin (BTC)

+2.3% $67,400

Ether (ETH)

+1% $4,765

(Price data as of November 9 @ 11:00 UTC)

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Good morning, Here's what's happening this morning:

Market Moves: Bitcoin Tops $68K

Technician's Take: ETH/BTC Forms Bull Pennant

And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time.

Biggest Movers

These are the biggest movers in the CoinDesk 20 over the past 24 hours:

Top Gainers:

Liteccoin (LTC): +7.2%

The Graph (GRT): +6.5%

Cardano (XRP): +6.3%

Top Losers:

There are no losers in CoinDesk 20 today

The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.

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Market Moves

by Omkar Godbole

Bitcoin tapped new record highs above $68,000 early Tuesday amid blockchain data pointing to renewed sell-side liquidity crunch.

"Over 85% of the coin supply has remained dormant since August 2021. Investors are just not spending their coins," blockchain analytics firm Glassnode said in a weekly report published Monday. "The supply dynamics paint a compelling picture of long-term holders hanging onto the vast majority of their stack."

Ether's rally continued with prices topping $4,800 for the first time. The native token of Ethereum's blockchain may soon face its own supply crisis as more than 8.2 million ether are now locked into the ETH 2.0 staking contract, with another 8 million locked into decentralized finance protocols.

Further, since Oct. 1, centralized exchanges have seen an outflow of more than 850,000 ETH, according to data provided by IntoTheBlock.

Options market data shows the number of open positions in ETH call options or bullish bets has crossed the 1 million mark – twice more than open interest put options offering downside protection. Other cryptocurrencies like Cardano's ADA token and litecoin (LTC) also picked up a bid while livepeer (LPT) surged 50%.

While sentiment remains bullish, low trading volumes could be a cause for concern. "Bitcoin trade volume [for USD pairs] today is about half its average from January to May. Ethereum volume has fared better, recently returning to just below January levels, although it sharply lags May volumes," data firm Kaiko research noted in the research note published Monday.

"Let’s hope a price crash is not all that’s needed to boost today’s lagging volumes, because it seems that today’s all time highs are not enough to draw in the amount of new investors we saw earlier this year," Kaiko added.

According to technical analysis rules, a low-volume price rally is often short-lived. However, that does not necessarily imply correction. It is quite likely that the trading volume may have shifted from USD pairs to stablecoin pairs.

In traditional markets, the risk remained under pressure, with the Japanese yen crosses trading lower. The S&P 500 formed a Doji candle on Monday, signaling uptrend fatigue. A pullback in equities may weigh over cryptocurrencies.

Read the original story here:

Open Positions in Ether ‘Calls’ Hits 1 Million Mark as Traders Pile Onto Higher Strike Options

Technician's Take

by Omkar Godbole

Bull Pennant in ETH/BTC

ETH/BTC's weekly chart (Source: TradingView)

Ether-bitcoin’s (ETH/BTC) weekly chart shows a bull pennant – a technical pattern marked by converging trendlines, indicating an impending continuation of the ether-bitcoin ratio’s upward move from 0.023 to 0.08 seen early this year.

A breakout would imply a shift in market leadership to ether.

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BOLO

Be on the lookout for the following events today:

ICYMI

In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:

Acting Comptroller of the Currency Michael Hsu on White House Stablecoin Report

"First Mover" hosts speak to Acting Comptroller of the Currency Michael Hsu about the White House's report on stablecoins calling for bank-like oversight. Plus, crypto markets analysis from FTX.US CRO Brett Harrison.

A Message from CoinDesk

What will 2022 bring? Crypto 2022 is CoinDesk’s ambitious effort to scope out what’s next. This week it's Policy Week, a week devoted to exploring the complex ways governments are interacting with the cryptocurrency ecosystem, and how policy decisions or lack thereof will affect the year ahead. Read more here.

Latest Headlines

The total market capitalization of all cryptocurrencies neared a milestone of $3 trillion.

The largest U.S. cryptocurrency exchange has said investors should expect lower trading volume in the third quarter, given the decline in crypto prices during that period.

Alexis Ohanian’s Seven Seven Six thinks Solana can support social at scale.

Every Big Bank Will Think About Crypto Trading, Says Ex-Citi CEO Pandit

Vikram Pandit believes every major financial institution will be considering trading crypto “in one to three years.”

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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