Market Wrap: Bitcoin Climbs Above $24K

Bitcoin (BTC) continued its ascension on Monday, rising 3% on average volume. The largest cryptocurrency by market capitalization surpassed $24,000 earlier in the day and remained above that threshold in the afternoon.

BTC’s hourly charts (below) show that the bulk of the push higher occurred between 10 a.m. and 12 p.m. UTC time before the price steadied.

This article originally appeared in Market Wrap, CoinDesk’s daily newsletter diving into what happened in today’s crypto markets. Subscribe to get it in your inbox every day.

Bitcoin’s gains have for the most part dovetailed with traditional markets. On Monday, the Dow Jones Industrial Average rose 0.09%. The tech-heavy Nasdaq Composite Index, meanwhile, fell 0.10% and the S&P 500 slipped 0.12%. Correlations between BTC and the three indexes remain above 0.60, indicating a strong relationship between BTC price movements and stocks.

Correlations range between -1 and 1, with higher figures signaling a stronger relationship. Investors often consider those correlations when the price movement in one group of assets outpaces the price movement in another.

Because BTC’s spike occurred outside of U.S. trading hours, traders may be watching whether the cryptocurrency’s price continues to align with equities.

Ether (ETH) was recently up 3.5%. Most of the increase also came during overnight hours in the U.S.

Altcoins rose, as well, with avalanche (AVAX) up 2% and chainlink (LINK), up 9%.

Bitcoin’s hourly chart moves into overbought territory, reverses course intraday

Investors continued to eye hourly and daily charts for signs of the crypto market’s future direction, which remains on tenterhooks amid mixed economic data. BTC’s hourly chart showed significant trading activity from 10 a.m. to noon (UTC) on above-average volume.

During that period, bitcoin rose about 3% with U.S. markets opening to bitcoin trading over $24,000. The 10-period relative strength index (RSI) rose to 83 as bitcoin’s price increased. RSI is a technical indicator that measures price momentum.

Readings below 30 imply that an asset is oversold, while a reading above 70 implies that an asset is overbought. BTC prices appear to have retreated following the RSI reading of 83 that occurred during the 4 a.m. candle. A candle is a visual image on charts to describe a price hike.

Bitcoin’s daily chart provides additional context to today’s move

BTC prices should continue to advance along a trendline noted in the Aug. 3 Market Wrap. BTC’s price could crack $28,000, although investors shouldn’t interpret that market as a price target.

Trendlines can be useful to traders in determining the direction and strength of a price move, particularly when used in conjunction with other technical indicators.

The trendline here is being used jointly with the RSI. The overbought reading (see chart above) showed an overbought reading of 70, but the daily chart shows a reading of 60, which falls below the overbought threshold.

BTC prices appear to have retraced from their sharp uptick in early morning trading, while maintaining what appears to be a general uptrend that began around July 13.

Derivatives markets also indicate a positive sentiment

BTC funding rates have turned positive again, following a brief turn negative on Aug. 3. Funding rates represent payments to traders who are long or short bitcoin. Those payments serve as a proxy for market sentiment.

A positive funding rate implies that traders who wish to be long BTC (have a positive view of the digital currency) are willing to pay traders who are short (have a negative view). Negative funding rates imply the reverse.

All told, positive funding rates often imply that crypto traders are bullish. BTC funding rates have been positive for all but five days since July 1.

Altcoin roundup

• Vitalik Buterin Plays Down Impact of Ethereum Forks After Merge: The blockchain’s co-founder said it’s unlikely that the platform will be “significantly harmed by another fork.” Read more here.
• Ether’s Deepest ‘Backwardation’ Since 2020 Crash Shows Traders Prepping for Ethereum PoW Split: Traders have been buying ETH in the spot market and selling ether futures to withstand volatility. Read more here.
• Dragoma Supporters Fall Victim to $3.5M Rug Pull: The funds from the Polygon-based Web3 game have been siphoned out of the project and into centralized exchanges. Read more here.

Relevant insight

• Listen 🎧 :Today’s “CoinDesk Markets Daily” podcast discusses the latest market movements.
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• Crypto-Mixing Service Tornado Cash Blacklisted by US Treasury:The department barred its use by U.S. persons as a matter of national security because North Korean hackers allegedly use the mixer to launder stolen crypto funds.
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• SoftBank Reports Record Quarterly Loss:The company, which has invested in crypto projects, cited a global tech sell-off and weaker yen.
• Iris Energy Turns On 41 Megawatts of Bitcoin Mining Machines Ahead of Schedule:The company plans to add another 50 MW by the end of next month, bringing its total hashrate to 3.7 exahashes per second.
• UAE to Clamp Down on Crypto Real Estate Money Laundering:Authorities want to trace payments made in bitcoin and ethereum as the country develops as a crypto hub.
• Multi-Blockchain Platform Geeq Receives $25M Capital Commitment From Investment Group GEM: The financing differs from traditional funding rounds in that the flow of capital depends on how Geeq performs.

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