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Market Wrap: Bitcoin Breaks $11.8K; BTC in DeFi Doubles in August

Bitcoin price is on the upswing as the amount of the world’s oldest cryptocurrency locked in DeFi jumps.

By Daniel Cawrey

Updated Sep 14, 2021, 9:46 a.m. Published Aug 20, 2020, 8:28 p.m.

Bitcoin’s price is trending up while August has been a hot month for the cryptocurrency in decentralized finance.

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Bitcoin (BTC) trading around $11,857 as of 20:00 UTC (4 p.m. ET). Gaining 1.3% over the previous 24 hours.
Bitcoin’s 24-hour range: $11,568-$11,891
BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin trading on Coinbase since Aug. 18.

Bitcoin is on the uptrend, going as high as $11,891 with buyers outnumbering sellers in the market Thursday. ”This is similar to what we saw on Sunday, Aug. 9 – a quick move from $11,500 to $12,000 and then back to $11,300,” said John Willock, CEO of crypto asset manager Tritum. “Maybe we've got $13,500 in the next phase up in the coming days,” he added.

David Lifchitz, chief investment officer for quant trading firm ExoAlpha, expects a bitcoin price bull run to proceed should it overcome a nearby hurdle. “All in all, $12,500 is the key level to watch for a sustainable breakout on strong volume,” he said. ”Anything different will be a fake, as it can be seen many times in a historical chart of BTC/USD.”

In the bitcoin options market, open interest (the number of outstanding contracts) is starting to level off after passing the $2 billion mark for the first time since July.

Bitcoin options open interest the past month.

Juicy returns in the DeFi market are making traders lose interest in options, according to Viashl Shah, founder of derivatives exchange Alpha5. “Every derivatives trader that was looking for incremental yield and levered returns has been besotted by the magnitude of moves in DeFi,” Shah told CoinDesk. “So, naturally, cost of capital dictates at least some attention that way.”

Bitcoin on DeFi doubles in August

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Thursday, trading around $415 and climbing 4% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

At the start of the year, the number of bitcoin locked in decentralized finance, or DeFi, stood at 1,453 BTC. That amount is now up to 48,922 BTC as of Thursday. In August alone, bitcoin in DeFi has more than doubled from 20,890 BTC at the first of the month. Decentralized finance is giving investors new avenues to generate income, or “yield,” and, as a result, bitcoin owners have over $570 million worth of BTC at current prices locked in the DeFi ecosystem.

Total bitcoin locked in DeFi the past year.

Michael Gord, co-founder of trading firm Global Digital Assets, says many traders are taking gains and buying more bitcoin given the potential ephemeral nature of DeFi. “I’d assume that DeFi profits are being put back into BTC as the safe asset,” he told CoinDesk. “DeFi long term will revolutionize finance, but this short-term bubble is bound to pop eventually, in my opinion.”

Other markets

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

0x (ZRX) + 22.3%
qtum (QTUM) + 16.5%
basic attention token (BAT) + 16.2%

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

chainlink (LINK) - 3.1%

Equities:

In Asia the Nikkei 225 ended the day slipping 1%, dragged down by manufacturer Dainippon losing 5.1% and Yahoo Japan down 4.5%.
In Europe, the FTSE 100 closed in the red 1.6% as U.S. unemployment numbers jumped to 1.1 million this week.
The United States’ S&P 500 gained 0.30% as tech stocks again made gains and has been the best-performing sector of the index so far this year.

Commodities:

Oil is is flat, up 0.05%. Price per barrel of West Texas Intermediate crude: $42.77.
Gold was in the green 1.2% and at $1,927 as of press time.

Treasurys:

U.S. Treasury bonds all slipped Thursday. Yields, which move in the opposite direction as price, were down most on the 10-year, in the red 5.2%.

The CoinDesk 20: The Assets That Matter Most to the Market

Commodities Bitcoin Ether Qtum 0x basic-attention-token DeFi Chainlink Equities

Daniel Cawrey

Daniel Cawrey has been a contributor to CoinDesk since 2013. He has written two books on the crypto space, including 2020’s “Mastering Blockchain” from O'Reilly Media. His new book, “Understanding Crypto,” arrives in 2023.