Market Wrap: With Fed Rate Policy Unchanged, Bitcoin Passes $11K; Ether Options Bet on Price Below $400

Thursday 17 September 2020, 7:09 AM AEST - 1 week ago

cdbpisep16CoinDesk 20 Bitcoin Price Index

Bitcoins price continues to move up, with a little help from the U.S. Federal Reserve, while ether traders are hedging in the options market.

btcsep16Bitcoin trading on Coinbase since Sept. 14.

Bitcoin hit as high as $11,099 on exchanges such as Coinbase Wednesday after the U.S. Federal Reserve announced it was keeping interest rates near zero until maximum employment is achieved. The price lost steam to $10,979 as of press time, however.

Buyers have already reached $11,000 per BTC. We expect an increase to $11,200, and then a test of $11,500, said Constantine Kogan, partner at crypto fund of funds BitBull Capital.

At least one stakeholder remains wary until there is more buying volume in the bitcoin market, however. Personally I think we need to see sizable purchase volume above $12,000 to really get this moving, otherwise I would tend to expect some more consolidation over the next few weeks, said Neil Van Huis, director of institutional trading at liquidity provider Blockfills. The last time bitcoin hit $12,000 was back on Sept. 1.

btcthirtydayBitcoin trading on Coinbase the past month.

Bitcoin mining could play a role in near-term market movements, added Van Huis. If BTC prices are higher, miners may look to capitalize on it by selling to raise cash, he said. The mining difficulty adjustment, expected on Sept. 19, is anticipated to trend higher since hashpower has been hitting record highs this week. That means older mining machines will be replaced with newer models in order for some operations to compete.

miningdiff2017Bitcoin mining difficulty the past three years.

Miners would essentially be speculating on whether it would be more profitable to just let their bitcoin holdings ride because they cant get access to equipment, or sell BTC to raise cash for equipment to mine more efficiently going forward, added Van Huis.

Italian over-the-counter trader Alessandro Andreotti pointed to the amount of bitcoin locked in decentralized finance,

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