Bitcoin price has recovered above its support levels of USD 7,000 after yesterday’s brutal battering, where Bitcoin finally relented and shed about 15% of its value in one day (CoinDesk).

To be fair, Bitcoin dips and spikes tend to be violent, with double-digit percentage gains and losses very common even after 10 years of existence.

Bitcoin pundits have taken out their emotions on Twitter and social media, but the general lack of panic, relatively, suggests that a lot of the sentiment for a Bitcoin bull in the long-run has not been diminished. Most traders are quick to remind that Bitcoin is still up over 100% from its 2019 lows near USD 3,100, and then this temporary dump has been predicted for a while, necessary for Bitcoin to purge sellers and consolidate, before the halving event in May 2020 reminds everyone that Bitcoin’s scarcity factor will bite even harder.

Altcoins are not doing much better than Bitcoin and will be very relieved that Bitcoin has recovered, to prevent further losses on a weekend.

Bitcoin holders are probably enjoying this period the most, according to blockchain analytics company IntoTheBlock, who notes that more than half of all known Bitcoin wallets — a number above 15.31 million — are said to be still “in the money”. This means that today’s price is still higher than that of the average price of the wallet’s UTXO. In other words, those wallets acquired coins at a price lower than today’s price, so those wallet owners were in profit.

The data collected shows that more than 54% of people acquired Bitcoin below USD 7,100. IntoTheBlock CTO Jesus Rodriguez, in fact, shows that the majority of these were purchased during the Bitcoin price range of USD 900 to USD 4,180. This would mean that the Bitcoin price would need to plunge a lot lower for most holders to feel any kind of heat on them.

According to information shared with CoinDesk, Bitcoin “is currently far from capitulation” and the current drop in price is only exaggerated by panic selling from short-term traders.

Interest in trading the world’s most-recognized digital asset certainly hasn’t dampened, as proven by yesterday’s record-breaking volume on Bitcoin futures platform Bakkt. Yesterday, Intercontinental Exchange (ICE) data showed a new all-time record of USD 20.3 million in Bitcoin traded across 2,728 futures contracts. This smashed the previous record by over 30%, set on 8 November.

And in case anyone’s wondering if that was temporary, open interest stayed at USD 1.75 million, almost a third of the previous days, suggesting traders still have a lot of appetite, and certainly showing more hunger than when Bakkt launched in September.

And with demand from institutional investors for more crypto hedging options and financial derivatives, financial giant Fidelity has now confirmed that its crypto trading foray will sign its maiden exchange before the end of 2019.

Fidelity president Tom Jessop says that the Fidelity Digital Assets (FDAS) crypto trading business promises to get the “best deal” for buying or selling crypto for institutional investors, who previously would have had to get all their deals via over-the-counter (OTC) desks. Jessop stated that they were already signing on liquidity providers, although did not mention the exact number:

“Between launching our trading platform five months ago to year-end, we will have more than doubled the number of liquidity providers. We are primarily focused on OTC liquidity providers. It’s likely we will connect to our first exchange perhaps before year-end.”

Should FDAS be successful in signing on that exchange, they would have a lot of access and would be able to provide liquidity for smaller trades, serving not only the huge volume traders and so-called crypto whales but also retail needs and smaller-volume needs. It will be a challenge though, since exchanges may prove more difficult to onboard than OTC desks since they tend to deal with smaller volumes and more comprehensive needs. A spokesperson explained:

“We apply a very high standard of counterparty evaluation, involving a rigorous risk management and onboarding process. This approach is something we’ve been able to apply to OTC desks with post-trade settlement more readily than working with an exchange.”

 

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