Oct. 1 2024

CoinDesk 20 Index: 2,075.25  +1.1%
Bitcoin (BTC): $63,851.97  +0.27%
Ether (ETH): $2,63297  +0.62% 
S&P 500: 5,762.48  +0.42%
Gold: $2,648.98  +0.52%
Nikkei 225: 38,651.97  +1.93% 

Crypto markets were muted during the first half of the Asia trading day owing to public holidays in China, Hong Kong and South Korea. Bitcoin traded around $63,900, an increase of about 0.5% in the last 24 hours, while ether rose just over 1% to $2,635. The wider digital asset market gained 0.2%, according to the CoinDesk 20 Index. China and Hong Kong are both off for China's national holiday, which is a week-long affair known as Golden Week in mainland China and one day in Hong Kong. South Korea is closed for Armed Forces day, a holiday introduced this year.

Traders have locked in almost $1 billion in bullish bets of bitcoin reaching $100,000 on derivatives exchange Deribit. The dollar value of the number of active call options contracts at the $100,000 strike price was over $993 million, the highest among all other BTC options listed on the exchange, according to data source Deribit Metrics. The second most popular option was the $70,000 call, boasting an open interest of over $800 million. "The highest open interest across all expirations appears at $100K and $70K for bitcoin, which some market participants interpret as supporting the bullish sentiment that seems to be pervading the market," crypto trading firm Wintermute said in a note shared with CoinDesk.

The digital assets sector continues to outperform the stock market this year, with bitcoin leading the charge, broker Canaccord said. The broker noted that the world's largest cryptocurrency finished the last quarter up around 140% year-on-year, outperforming ether which gained about 60% and the S&P 500 stock index, which rose almost 30%, over the same period. If bitcoin follows historical patterns it tends to rally 6-12 months following the halving, and reach new highs 2-6 months later, meaning a potential rally could start between now and April, the broker said. Bitcoin is still performing like other risk assets for now, and is reacting positively to the "lower-rate environment," analysts led by Michael Graham wrote.

Market pundits attributed bitcoin's 3.5% slide on Monday to early morning losses in Japan's Nikkei index, which tanked after Shigeru Ishiba, seen as a monetary-policy hawk, won the leadership race to become the country's prime minister.

The yen weakened across the board, challenging the narrative that Ishiba's hawkishness weighed on risk assets, including BTC. Hawkish/dovish developments typically have a greater bearing on national currency.

The USD/JPY pair rose 1% on Monday, and the AUD/JPY cross, seen as a risk barometer by analysts, rose 1.15%, offering positive cues to bitcoin and other riskier assets. Both pairs are up at press time, hinting at continued yen depreciation and risk-on environment.

It appears other dynamics were at play on Monday rather than just Ishiba and Nikkei's influence. BTC may have simply been overbought and due for a pullback after a near 90-degree rally from lows under $53,000.

- Omkar Godbole