On Tuesday, Bitcoin’s price was trading around $29,300, going under $30k for the first time after a month, and today we are back above $31,500. The same is the case for Ether which went to $1,717 and is now near $1,915.
The total cryptocurrency market cap has also gone above $1.32 trillion.
Interestingly this latest uptick came as crypto derivatives platform FTX raised $900 million from over 60 investors, including big names like Paul Tudor Jones family, Alan Howard, Sequoia Capital, Third Point, Thomas Bravo, Israel Englander, Coinbase Ventures, and SoftBank Group.
Besides FTX, amidst the downward trending non-fungible tokens mania, NFT marketplace OpenSea raised $100 million billion led by VC firm a16z, giving it a $1.5 billion valuation.
This “implies a16z thinks trading volumes for NFTs will likely reach ~$60 bn annually),” said Jeff Dorman, CIO at digital asset management firm Arca. He further noted that every other time metric, like adjusted on-chain volume, transaction count, CEX, and DEX volume, is still “showing insane growth,” other than the last 2 months. Not to mention, it doesn’t take these metrics to skyrocket as users rush in driven by rising prices.
“Every data point is telling you that prices of digital assets are going higher… except the prices themselves. Timing bottoms is hard.”
While the crypto market remains subdued, which has been nearly three months after the mind-blowing rally since March 2020, the private crypto market continues to gain traction and raise money, suggesting increasing confidence regarding crypto’s future.
“Private valuations for companies in this space are going crazy, indicating massive future growth potential, and the numbers support that long-term trend.”
Unrealistic expectations both ways is a hallmark of crypto. https://t.co/AhxWWknluN
— Alex Krüger (@krugermacro) July 21, 2021
A bounce in price after such a deep rout and seven-day volatility at its lowest was imminent. Additionally, CME futures went in backwardation, where future prices are lower than the spot prices, further supporting the bounce.
As we have been reporting, open interest in BTC terms has also been increasing sharply for over a month. It is now approaching the April and May highs, sitting at 395k BTC, up from 95k BTC from its May 24 bottom, “signalling that many traders are still actively trading in the derivatives market in this slow market environment,” as per Arcane Research.
395k BTC corresponds to 2.1% of the circulating supply, and historically, it has not remained at such high levels for long, it added.
Last summer, the OI grew steadily before a mid-August correction which slashed it by 50k BTC. Similarly, the OI also saw a considerable decline as BTC pushed above its 2017 ATH in late December and then sharp declines amid April and May corrections.
But with funding rates and the basis premiums low, considerably lower than in April, the market is not as exposed to a massive long liquidation event and is likely to be less leveraged towards the upside than a couple of months back.
This article is Originally posted on CoinCentral.com