● Bitcoin is struggling to retain the $10,600 price range.
● Uniswap’s September volume set records, but appears to be decreasing.
Thanks for joining us on this week’s edition of Overbit Weekly RoundUp. Markets can be exhausting for traders and investors alike. We believe it’s incredibly important to step back from the action over the weekend, catch your breath, and recap what happened in the previous week. With that being said, let’s move into cryptocurrency markets and see what we can discern from all the chaos.
We’ll first start off with Bitcoin, where the story of the week is a non-event: Bitcoin’s continuing range in the mid $10k region. At the time of writing, Bitcoin is trading around $10,557, with its 24-hour range between $10,500 and $10,900. Looking at some technical indicators, we can see that BTCUSD is above its 10-day moving average, but below the 50-day moving average. This is a tell-tale sign of sideways movements for market analysts, as the pair is essentially wedged between two of the most significant indicators. The price hasn’t been entirely flat, though; we did see BTCUSD drop to $10,421 on spot exchanges as Bitcoin moved in-line with traditional equities markets. Katie Stockton, analyst for Fairlead Strategies, recently explained this correlation which points to the current stagnant price action for Bitcoin: "Bitcoin has been attuned to the day-to-day moves in risk assets, but the end result of the intraday volatility is a consolidation phase on the chart," said Stockton. We are on the same page as Stockton - this certainly is a consolidation period for Bitcoin. And after being in the cryptocurrency space for so long, one thing is for sure: Bitcoin consolidation periods don’t last long.
Moving to the flipside of cryptocurrency, we take a look at Uniswap - an experimental new protocol that has powered the world of decentralized altcoin trading for the last few weeks. Looking back on the past month, Uniswap has exceeded all expectations for September with millions of dollars pouring in from all around the world. To be specific, Uniswap recorded more than $950 million on the very first day of September, which rivals even many of the centralized exchanges. Even with Bitcoin currently stagnant, however, it seems Uniswap is losing a bit of steam. Volume has been declining at a gradual but steady pace: Toward the end of Tuesday, 29 September, volume was at $312 million, which is significantly lower than the $468 million daily average. Whilst this may be a less-than-promising sign for Uniswap, not everyone evaluates volume the same way. Brian Mosoff, chief executive of Ether Capital, seems to be much more focused on liquidity, which is currently at a new record of $2.29 billion. "Liquidity has just reached a new all-time high on Uniswap – this means that asset pricing is becoming more competitive and because of this it may capture the majority of trading volume once speculative activity abates," Mosoff added. Either way, we believe decentralized exchanges will be a main component of the financial future, and so we remain bullish on projects like Uniswap, even with the current ebbs and flows. However, with Bitcoin nearing a turning point, we always recommend de-risking your portfolio, especially given the history of Bitcoin dragging down altcoins with its movements.
To close out this week of trading, we take a brief look at the traditional finance markets. It seems the markets were driven by risk-keen sentiment, which surged late into the American trading session on renewed hopes for a US coronavirus stimulus package. With investors increasing their risk appetite, USD seems to have taken a hit, losing ground against most major rivals, including the GBP/USD pair. We should continue to see fluctuations with the EUR/USD and USD/JPY pairs until there is more clarity on global economic recovery. The major factors still continue to be related to individuals country's post-COVID policies, as major economies rush to find a balance between inflation and stimulus. Gold, the historical safe-haven asset, continues to range in the mid $1800s, down slightly from its all-time high. As always, you can trade these assets on Overbit.com.