Prices of blockchain-based assets are climbing amid a fresh bout of uncertainty regarding cryptocurrency regulation and enforcement in China,
- Bitcoin (BTC) was trading at $36,278 as of 21:00 UTC (4 p.m. ET), jumping 10.2% over the previous 24 hours.
- Bitcoin’s 24-hour range: $32,557-$36,890 (CoinDesk 20)
- Ether (ETH) trading at $2,561 as of 21:00 UTC (4 p.m. ET). In the green 2.3% over the previous 24 hours.
- Ether’s 24-hour range: $2,418-$2,613 (CoinDesk 20)
Bitcoin price popping
Bitcoin, the world’s largest cryptocurrency by market capitalization, was in the green Wednesday by 10.2% as of press time. The price was above the 10-hour moving average and the 50-hour moving average, a bullish signal for market technicians.
The price of bitcoin jumped from $32,557 at 02:00 UTC (10 p.m. ET Tuesday) to $36,890 by 17:20 UTC (1:20 p.m. ET) Wednesday, a 13.3% gain based on CoinDesk 20 data. Bitcoin then lost a bit of steam, dropping to $36,278 as of press time.
Bitcoin traders appear to be ignoring potentially dismal news for crypto in China. That includes a shutdown order for miners in Qinghai province, the ban of some blockchain keywords across the country and arrests of more than 1,000 people for potential crypto money laundering.
In fact, on-chain data suggests that there is much less bitcoin dry powder on exchanges the past few weeks, as some crypto investors are clearly buying and scooping BTC into off-trading venue wallets.
“One signal in favor of continuation for the current bullish reversal is the amount of BTC seen leaving exchanges from an on-chain perspective,” said Sean Rooney, head of research for digital asset manager Valkyrie Investments. Exchange outflow throughout this recovery was the highest experienced so far in 2021, he said.
Bitcoin reserves dropping
According to data aggregator CryptoQuant, exchange holdings across major venues is down to $2.46 million, the lowest since May 17.
Rooney believes the pattern will need to persist for bitcoin to pop back above $40,000.
“This trend will need to continue to break through heavy resistance around $42,000,” Rooney added. “This bounce from oversold conditions was potentially aided by a much needed positive sentiment with growing hopes of adoption in El Salvador.”
Dull bitcoin futures market
Since May 19, when futures open interest (OI) on the BTC market was at $12.1 billion, a bearish-to-sideways condition has developed in derivatives.
As of press time, bitcoin futures OI is at $11.1 billion, an 8% drop and a reversal from ever-climbing futures OI seen earlier this year. The figure reached an all-time high of $27.4 billion in OI on April 13, according to data…