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HomeCryptocurrenciesBitcoinMarket Wrap: Bitcoin Fails to Reach $16.5K; Wrapped BTC Hits $2 Billion

Market Wrap: Bitcoin Fails to Reach $16.5K; Wrapped BTC Hits $2 Billion

Analysts are bullish on bitcoin’s price but the options market is decidedly bearish on the remaining weeks of 2020. Ethereum’s wrapped bitcoin token crosses $2 billion locked.

  • Bitcoin (BTC) trading around $16,240 as of 21:00 UTC (4 p.m. ET). Gaining 0.30% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $15,971-$16,487
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
Bitcoin trading on Bitstamp since Nov. 11.
Source: TradingView

Bitcoin’s price trended up for the third straight day, hitting as high as $16,487, according to data from CoinDesk 20. It dipped somewhat since hitting that level and traded at $16,240 as of press time.

“Bitcoin rose significantly above the $16,100 mark. Buyers pushed the price due to the large volume,” noted Constantin Kogan, managing partner at investment firm Wave Financial.

Major exchange daily spot volumes on Friday were at $668 million as of press time, but not close to Thursday’s $1.1 billion in volume.

Major USD/BTC spot volumes the past month.
Source: Shuai Hao/CoinDesk Research

George McDonaugh, managing director at investment firm KR1, highlighted a key difference between the price run-up in 2020 versus the mooning that occurred back in 2017. “Bitcoin has spent 0.32% of its life at $16,000 and above, which means there were relatively very few buyers at that level back in 2017,” he told CoinDesk. “This correlates to there being very few sellers at this level now, meaning there isn’t a strong resistance band for the bulls to push the price higher.”

Weekly bitcoin spot trading on Bitstamp since 2013.
Source: TradingView

“I’m seeing an increasing demand from more traditional family offices making their first investments into bitcoin as a long-term hedge or as insurance for their existing portfolio of investments,” Michael Gord, chief executive officer of Global Digital Assets, told CoinDesk. “I expect this trend to continue as bitcoin keeps maintaining its value and being uncorrelated to most other asset classes.”

Read More: $300M BTC Flow to Binance From Huobi as China Toughens on Exchanges

Bitcoin isn’t entirely uncorrelated from other asset classes like equities, but lately the correlation between the world’s oldest cryptocurrency and the S&P 500 has dropped a little bit.

Bitcoin’s 90-day correlation to the S&P 500 in 2020.
Source: Shuai Hao/CoinDesk Research

KR1’s McDonaugh is expecting bitcoin’s price to reach $20,000, but it might take some time to get there as some profit-taking is likely to ensue. $20,000 is a far more psychological barrier, so it is likely to be ‘HODLers’ – people holding bitcoin forever – that may de-risk at that level and produce some selling pressure,” he said.

Bitcoin options traders aren’t fully convinced that it will trade at $20,000 in 2020. The probabilities calculated using December expiration have pegged only a 16% chance of $20,000 bitcoin, a 29% for $18,000 and a 39% of $17,000 according to data aggregator Skew.

Probability of bitcoin prices at December expiration based on the options market.
Source: Skew

Nevertheless, analysts project that bitcoin can soon surpass at least $16,500 consistently. “Given market sentiment and current trends, I am still bullish on BTC,” said Andrew Tu, an executive at trading firm Efficient Frontier. “Though we may range between $16,000 and $16,500 for a bit before breaking resistance.”

Wrapped bitcoin hits $2 billion locked

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Friday, trading around $470 and climbing 2.6% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: Payments Provider BitPay Rolls Out Cryptocurrency Payroll Service

The amount of bitcoin “locked” in the Ethereum-based wrapped bitcoin contract passed $2 billion Thursday, and is staying at that level Friday. In order to use bitcoin on Ethereum, it must be “wrapped” and used as a token on the network using a standard called ERC-20.

Total value locked for wrapped bitcoin or WBTC the past three months.
Source: DeFi Pulse

Brian Mosoff, chief executive officer of investment firm Ether Capital, says the parking of bitcoin on Ethereum is giving the network a huge leg up over its up-and-coming smart contract competitors, including Polkadot, Cardano and Cosmos, among others.

“It’s proving that Ethereum is the thing everyone is plugging into and (networks like) Polkadot may not have its day in the sun,” Mosoff told CoinDesk.

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