Bitcoin is holding above $50,000 at press time and is up about 2% over the past week. Higher price moves in cryptocurrencies have coincided with a rally in global stocks this week, signaling greater appetite for risk among investors. Ether, the second-largest cryptocurrency by market capitalization, reached $4,000 on Friday for the first time since May. ETH is up about 20% over the past week, extending its outperformance versus bitcoin. “BTC wants to join the party, too,” Martha Reyes-Hulme, head of research at digital asset prime brokerage and exchange Bequant, wrote in an email to CoinDesk. “Bitcoin dominance has been falling towards 40% and may gradually weaken as investors branch out to other areas of the market, focusing more on use cases than purely store of value,” Reyes-Hulme wrote. Bitcoin’s dominance ratio represents its market capitalization as a percentage of the overall $2.28 trillion crypto market. If bitcoin fails to break above $50,000 resistance, a reversal could “take the price down to the low $40K levels and might as well indicate a dead cat bounce,” Ulrik Lykke, executive director at digital asset hedge fund ARK36, wrote in an email to CoinDesk. Bitcoin is up about 70% year to date compared to a roughly 20% rise in the S&P 500 over the same period. Gold and bonds have produced negative returns so far this year as investor appetite for risk continues following the coronavirus pandemic shock in March 2020. Both equities and cryptocurrencies experienced relatively low volatility over the past few months, partly driven by the market’s expectation of continued monetary policy easing. On Friday, the U.S. added 235,000 jobs, falling well short of the 725,000 projection. The jobs miss reinforced expectations that the Federal Reserve’s stimulus program, known as quantitative easing (QE) could persist longer than expected and therefore boost asset prices. Bitcoin and stocks moved higher shortly after the jobs report. Realized volatility for ether is starting to rise again after a flat August. Meanwhile, the cost to buy short-term ETH options is also rising, which could point to overheating. Large-size call positions were spotted on Wednesday morning when ETH broke out of a monthlong range above $3,400, according to options data provider Skew. And technical charts suggest the rally is overbought, albeit less so compared to August. The chart below shows ETH front-end risk reversals, the difference in implied volatility between similar call and put options, have flipped strongly to the put side. “With the speed of this move higher, a sharp mean-reversion move would not be too surprising,” crypto trading firm QCP Capital wrote in a Telegram chat. Programmable blockchain Solana’s SOL token rallied to a new high on Friday near $145, replacing the meme-focused cryptocurrency dogecoin as the seventh-largest coin by market value. SOL’s market capitalization jumped to $42 billion, surpassing dogecoin’s $38 billion market cap. Since Solana launched the non-fungible tokens (NFT) project Degenerate Ape Academy on Aug. 15, the SOL token has tripled in price. The timing couldn’t have been better, given the ongoing NFT sugar rush, wrote CoinDesk’s Omkar Godbole. Most digital assets in the CoinDesk 20 ended higher. Notable winners as of 21:00 UTC (4:00 p.m. ET): Notable losers:
