Market Wrap: Bitcoin Hits $40K Again While Ether Volume Is Erupting This Year

After closing out last week at over $40, on Sunday, bitcoin hit that price again Thursday while traders are pushing ether volumes to new liquidity levels.

• Bitcoin (BTC) trading around $39, as of UTC (4 p.m. ET). Gaining % over the previous 24 hours.
• Bitcoin’s hour range: $36,$40,  (CoinDesk 20)
• BTC above the hour and hour moving averages on the hourly chart, a bullish signal for market technicians.

Bitcoin’s price was back to bull mode Thursday, steadily climbing to as high as $40,, according to CoinDesk 20 data. It’s a reversal from this week’s bearish-to-sideways action, with the world’s oldest cryptocurrency at $39, as of press time.

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“Bitcoin passing $40, was seen by many as inevitable, and reaching this level is just the continuation of a trend of smart money continuing to buy even as traders with less conviction shake out during sell-offs,” Guy Hirsch, managing director for U.S. at multi-asset brokerage eToro, told CoinDesk. The last time bitcoin was over $40, in the spot markets was Sunday, Jan. 10, prior to a precipitous fall opening the week.

“Institutions are still buying up BTC in huge quantities,” said cryptocurrency over-the-counter trader Alessandro Andreotti. “I think this rally can continue as before, but it’s too early to call.”

In the derivatives market, funding rates are still in positive territory, signalling that leveraged traders are more than willing to pay up to pile more margin on long plays, according to data aggregator Skew.

“High volatility is having little impact on risk appetite,” noted Denis Vinokourov, head of research at crypto brokerage Bequant. “Recent success in these opportunistic and somewhat ambitious market bets is also likely driving herd-like behavior.” 

Indeed, volatility is high in the bitcoin market: The cryptocurrency’s day realized volatility was at over 89% Wednesday, the highest it has been since April 17, , when that metric was at 92% in the early days of coronavirus-induced turmoil across all markets.

Analysts don’t expect volatility in the cryptocurrency market to abate, which can actually be good for traders but can be horrendous for long-term investor balance sheets, particularly institutional funds with limited partners to whom they must answer. 

“People need to understand that bitcoin is a hyper-asset with a built-in steam engine that is explosive up and down,” noted over-the-counter crypto trader Henrik Kugelberg. “With all the money printing and the sad developing spread of COVID throughout the world, widespread agonizing economic hardship and a few more factors spell advantage to bitcoin.”

Chad Steinglass, head of trading for digital assets capital markets firm CrossTower, agrees gyrations in crypto will continue. “I believe that the trend of bull runs briefly interrupted by short duration profit taking dips will continue for the foreseeable future.”

Ether volume bonanza so far in

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Thursday, trading around $1, and climbing % in 24 hours as of UTC ( p.m. ET).

In , ether volumes on the eight major CoinDesk 20 spot exchanges averaged $ million per day. In so far, those volumes are up almost twelvefold, averaging $ billion per day.