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Market Wrap: Bitcoin Extends Losses While Traders Remain Bullish on Ether

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Cryptocurrencies were mostly lower on Friday aside from a few standouts such as Terra’s LUNA token, which was up about 9% over the past 24 hours. Bitcoin was trading at the lower end of its weeklong trading range around $53,000 at the time of publication, which is below its $1 trillion market capitalization.

BTC, the world’s largest cryptocurrency by market capitalization, is up about 2% over the past week compared to a 7% gain in ether and a 13% gain in Solana’s SOL token over the same period. The dispersion in weekly returns suggests that alternative cryptocurrencies (altcoins) are starting to outperform.

Latest prices

  • Bitcoin (BTC): $53,528, -6.2%

  • Ether (ETH): $4,218, -7.2%

  • S&P 500: -0.9%

  • Gold: $1,783, +0.8%

  • 10-year Treasury yield closed at 1.36%

Headwinds for risk assets

Some analysts are paying close attention to the slower pace of global monetary easing, which could reduce investors’ appetite for speculative assets such as cryptocurrencies and equities.

“In our view, the speed with which global liquidity contracts is the most important factor for cryptocurrency performance in the weeks ahead and possibly even into early 2022,” Coinbase wrote in a newsletter to institutional clients on Friday. The U.S. crypto exchange noted that overall market performance could be mixed heading into the U.S. Federal Reserve Open Market Committee (FOMC) meeting on Dec. 14-15.

“The steady unwinding of monetary accommodation in 2022 points to both lower returns for equities and losses for bonds, and greater volatility than over the past 20 months,” MRB Partners, a global investment research firm, wrote in a Friday report.

Ether takes a breather

Ether, the world’s second-largest cryptocurrency by market capitalization, continues to struggle below its all-time price high of $4,865. The current pullback in ETH could stabilize around the $4,000 support level, although the price rally since the July low around $1,740 is starting to fade.

On a relative basis, ether is poised to outperform bitcoin if a breakout above 0.08 in the ETH/BTC ratio is confirmed next week. Charts still show significant resistance, which preceded downturns in ETH/BTC during the 2018 crypto bear market.

“This [pending] breakout is essential because it represents a resistance line going back to the 2017 top when one ETH was 0.15 BTC. The monthly close of the ETH/BTC chart was the highest bullish close in 45 months,” Lukas Enzersdorfer-Konrad, chief product officer at Bitpanda, wrote in an email to CoinDesk.

ETH/BTC price ratio (Damanick Dantes/CoinDesk, TradingView)
ETH/BTC price ratio (Damanick Dantes/CoinDesk, TradingView)

For now, the options market remains bullish on ether. The chart below shows the largest number of calls with an exercise price of $5,000 ETH.

Ether options open interest by strike (Deribit)
Ether options open interest by strike (Deribit)

Altcoin roundup

  • Terra’s LUNA token surges to new all-time high after big week of gains: The token of the Ethereum competitor surged to an all-time high price of $69.91 Friday afternoon after starting the week at around $49. The token climbed to become the 11th largest cryptocurrency by market capitalization, surpassing the token of another Ethereum competitor, Avalanche, and meme coin shiba inu, according to data from CoinGecko.

  • Blockchain.com to introduce NFT marketplace: Crypto exchange and digital wallet provider Blockchain.com is developing a marketplace for non-fungible tokens (NFT) because of to increased interest in the sector, reported CoinDesk’s Jamie Crawley. The Luxembourg-headquartered company has opened a waiting list for the new platform, which will allow users to buy, sell and store NFTs. The existing process for buying an NFT is “complex and unintuitive,” Blockchain.com said. The company aims to make it more straightforward and user friendly by adding NFT functionality directly into its wallet.

  • Crypto lender Celsius admits losses in $120 million BadgerDAO hack: Crypto lender Celsius Network confirmed the company has lost money from the latest decentralized finance (DeFi) hack on BadgerDAO, reported CoinDesk’s Muyao Shen. During an ask-me-anything (AMA) YouTube live stream on Friday, Celsius CEO Alex Mashinsky said the company “lost money” in the BadgerDAO hack without specifying the value of the losses.

Relevant news

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

  • Polygon (MATIC): +8.0%

Notable losers:

  • Uniswap (UNI): -11.4%

  • Cardano (ADA): -8.8%