Market Wrap: Bitcoin Bumps Close to $11.6K; Ether Options Open Interest Dips

Bitcoin bounced close to $11,600 before retreating a bit while ether options traders are less active than they were in September.

After a flat weekend that saw the world’s oldest cryptocurrency stick to a tight $11,300-$11,400 range, bitcoin’s price jumped Monday as high as $11,598 before settling to $11,552 as of press time. 

In its weekly investor note, quant trading firm QCP Capital put bitcoin’s technical support at $10,500, with any point above positive for the overall market due to payments firm Square buying $50 million in bitcoin. It has stayed above that level comfortably since Oct. 2.

”Last week Square’s purchase put a nice floor in BTC right at the key trendline and 10,500 level, with their average purchase price being $10,617 for 4,709 BTC,” the QCP note read. “Square’s purchase and effective lobbying of other corporate treasury desks through their white paper will give people confidence that a five-digit BTC price will be sustainable.”

On the macroeconomic front, global stock markets are anxiously awaiting further economic stimulus in the face of an increasing number of coronavirus cases, said Rupert Douglas, head of institutional sales for broker Koine. Equities traders want another round of stimulus as well as a weaker dollar, which supports gold, silver and bitcoin, too, he added. 

Indeed, since Sept. 25, the U.S. Dollar Index, a measure of a basket of fiat currencies versus the greenback, has been flat, in the red 0.01% Monday at press time.

“Macroeconomic news and markets have been mostly positive across the globe, with equities up 2%-3% last week,” said Jason Lau, chief operating officer for cryptocurrency exchange OKCoin. He also noted that funding rates have been mostly positive the past three days, indicating traders are mostly paying for margin to go long in the bitcoin market.

“Positive funding rates in the BTC futures markets and recent large corporate purchases, for example Square, have also increased short term bullish sentiment in line with traditional markets leading into year end,” Lau added. 

Ether options open interest lower in October

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday trading around $387 and climbing 4% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Prices jumped nearly 4% several hours after digital currency asset manager Grayscale announced its Ethereum Trust has become a Securities and Exchange Commission (SEC)-reporting company. Grayscale is owned by CoinDesk’s parent company, Digital Currency Group

In the options market, after a record September for open interest on derivatives venue Deribit, October’s volume is much lower. In the first 10 days of September, ether options open interest averaged $425 million. For the first 10 days of October, that average was down 18% to $346 million.

Despite a mostly bullish run for ether to start October, options traders are less interested in placing bets on Deribit, which is the largest ether options venue. Vishal Shah, an options trader and founder of derivatives exchange Alpha5, says a decline in DeFi interest this month may be the culprit for open interest dipping. “I think, without over-analyzing it, DeFi has fizzled a touch, naturally reducing the need for ETH optionality on the margin,” he said.

Other markets

Digital assets on the CoinDesk 20 are mostly green Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

One notable loser as of 20:00 UTC (4:00 p.m. ET):

Equities:

Commodities:

Treasurys: