After a week of record volumes for 2020, bitcoin’s price dropped on decreasing trading volumes. Meanwhile, assets locked in DeFi are recovering since the November dip – said to be due to the Ethereum 2.0 network upgrade.
Bitcoin is trading around $22,770 (Bitfinex) at the time of writing, reclaiming some of the losses from the 10% slump to as low as $21,900 on Monday.
The flagship cryptocurrency has bounced from the 12-hour 21 exponential moving average as it attempts to find its feet for market technicians to analyse further.
BTC/USD Corrects After All-Time-High
After a strong run to $24,000 on Monday, the longest-standing crypto dropped to as low as $21,886 (Biftinex) on Monday amid lower-than-average trading volumes on various exchanges, per data from Coinalyze.
The slump was quickly cut-short though when buyers stepped in at a historically significant technical indicator – the 12-hour 20-exponential moving average (EMA). The white line above is a lagging indicator and averages-out price-action within a given time-frame.
As price fell, order books grew thinner, which is normal since traders are more inclined to sit on the sidelines during Christmas week. In fact, combined volumes fell from $79.91 billion on Dec. 17 to $48.1 billion on the 21st – the day of the sell-off.
ETH Locked in DeFi Recovers from November Lows
At the same time, the world’s second-largest cryptocurrency by market capitalization, ether (ETH) also slipped on Monday trading, correcting 7% in 24 hours.
However, the mild correction didn’t deter Ethereum’s DeFi sector from its recovery. The amount of ether ‘locked’ in decentralized finance for yield continued to climb to 7.2M, the highest in almost two weeks.
TVL hit a high of 9.4M on Oct. 22, according to DeFi Pulse. Since then, the amount of locked ether fell to as low as 6.7M before rebounding in December.
ETH/USD Falls Short of Expectations; Holds Above $600
Ethereum is trading at just over $626 at the time of writing as the cryptocurrency licks its wounds and relatively modest performance in comparison to bitcoin.
The runner’s up cryptocurrency platform took an 8.9% drawdown on Monday, more or less mirroring bitcoin’s price-action as it holds above the 20-daily exponential moving average.
The question on every Etherean’s mind is not ‘whether’ Ethereum will perform, but ‘when’.
The ball is in your court, Ethereans.