Bitcoin Overcomes Technical Hurdle; Ethereum Prints 7 Consecutive Green Monthly Candles
Before moving into the weekend, Bitcoin started seeing traction and made its way past $58,500.
As of writing, we are still keeping around $57k on the back of very low funding rates. The highest Bitcoin funding rate is currently 0.0376% on Binance despite the price of Bitcoin increasing by about 11.5% to its highest level since mid-April.
Low funding rate has been the case ever since April 17, when over a million traders were liquidated for $10.1 billion. The funding even further minimized after another $4 billion were liquidated on April 22nd.
The same has been the case for ETH funding rates which are the highest at 0.056% on OKEx, while the price continues to hit a new all-time high — up 44% in the last 8 days to climb to $2,955.07 today and 0.052 BTC on Friday.
With seven straight green months in a row, Ether had its largest-ever monthly close. ETH -4.97% Ethereum / USD ETHUSD $ 2,965.82
-$147.40-4.97% Volume 19.19 b Change -$147.40 Open $2,965.82 Circulating 117.7 m Market Cap 349.09 b 15 h South Korea’s Largest Crypto Exchange Operator Raises $85 Million at an $8.65 Billion Valuation 16 h DeFi Rallies on China Ban as Chinese Turn to Decentralized Projects, Crypto Prices Recover to Pre-ban Levels 1 d YFI Creator Andre Cronje Launches a Vampire Attack on Popular Ethereum NFT Marketplace OpenSea
— Bluntz (@SmartContracter) May 1, 2021
With funding remaining flat, it means the rally is being led by spot buying, which makes it more sustainable and less prone to get wiped out by a brutal liquidation.
Open interest on Bitcoin futures also has yet to recover as it is currently at $19.8 billion, down from $27.68 billion on April 13. OI on Ethereum futures meanwhile continues to increase, perched on a record $8.5 billion, up from $2 billion at the beginning of this year.
Amidst all the positive action, hedge funds on CME that have been record short on Bitcoin since late last year to earn all the yield have also decreased their short exposure. Overall, the net short position has fallen to early March level.
The latest price action has helped Bitcoin surpass the technical hurdle of its 50-day average price. According to traders, Bitcoin’s move above $57,000 is a bullish sign for further continuation, but it needs to be seen if it will be able to maintain this level.
Trader SmartContracter sees the current momentum to take bitcoin to $74,000.
Interest in both Bitcoin and Ethereum continues to grow, especially the second-largest cryptocurrency, which has its big upgrade, London hard fork, with EIP 1559 coming in July. As we reported, Rothschild bought the shares of Grayscale Ethereum Trust for the first time in Q1, and Guggenheim’s CIO shared that money is also flowing into ETH and other credible cryptos.
Assets in Bitcoin products, including ETFs and ETPs, meanwhile have reached a record high of $9 billion at the end of the first quarter, as per ETFGI.
“If you make an investment today or you make an investment in early December like we did, you have to expect multiple 20% to 30% pullbacks in the bull-market phase,” Troy Gayeski of Skybridge Capital said this week on Bloomberg. “But that being said, I mean, the combination of extraordinary supply growth, we still think we’re in the early innings of the adoption cycle.”
Meanwhile, Mike McGlone of Bloomberg continues to see Bitcoin’s diminishing supply combined with the historically low interest rate and a substantial amount of money being pumped into the system to act as catalysts to take it to $100,000.