Outlook for the Day: Bitcoin Finishes the Day Calmly

Crypto markets were quiet in the first half of the Asian trading day due to public holidays in China, Hong Kong and South Korea. Bitcoin is trading around $63,900, up about 0.5% in the last 24 hours, while ether is up just over 1% to $2,635. According to the CoinDesk 20 Index, the overall digital asset market gained 0.2%. Markets in China and Hong Kong will be closed for a national holiday known as Golden Week in mainland China. South Korea is closed for Armed Forces Day, which was introduced this year.

Investors placed nearly $1 billion in bullish bets on derivatives exchange Deribit that bitcoin would reach $100,000. According to Deribit Metrics data, the dollar value of the number of $100,000 active call option contracts was $993 million, the highest among all other BTC options listed on the exchange. The second most popular option was the $70,000 option with over $800 million in open interest. Crypto trading firm Wintermute shared its views on the issue: “The highest open interest at all expirations appears to be $100 thousand and $70 thousand for bitcoin. Some market participants attribute this to the bullish sentiment taking over the market.”

Broker Canaccord reported that the digital asset sector continues to outperform the stock market this year, with bitcoin leading the way. The world’s largest cryptocurrency finished the last quarter up nearly 140% on an annual basis, outperforming ether, which gained about 60% in the same period, and the S&P 500 stock index, which rose almost 30%, the broker said. At the same time, the company said that if bitcoin repeats past cycles, it tends to recover 6-12 months after the halving and reach new highs 2-6 months later, meaning a potential rally could begin between now and April. Analysts led by Michael Graham wrote that bitcoin is performing similar to other risk assets for now and is reacting positively to this environment.

The chart shows the dollar value of total transfer volume on the Bitcoin blockchain since 2015. The level of economic activity remains low compared to previous bull market peaks. Source: Lance Roberts