Everything you need to make sense of the crypto markets and beyond

By the CoinDesk Markets Team

Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets

July 29, 2021

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(Price data as of July 29 @11:00 UTC)

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Good morning, and welcome to First Mover. Here's what's happening this morning:

• Market Moves: Bitcoin Expected to Pause Before Next Rally
  
  • Also: Why stablecoins are in the spotlight
    
    
• Technician's Take: Bitcoin Overbought at $40K Resistance; Support at $34K-$36K

  • Bitcoin's short-term uptrend could stall at resistance.

And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and me at 9:00 a.m. U.S. Eastern time. Today the show will feature guests:

• Tom Pageler, PrimeTrust CEO
• Rich Rosenblum, GSR Co-Founder & President

• Carlos Domingo, Securitize CEO

 – Lawrence Lewitinn

Biggest Movers

These are the biggest movers in the CoinDesk 20 over the past 24 hours:

Gainers:

• The Graph (GRT): +7.7%

• Polkadot (DOT): +1.8%

• Aave (AAVE): +1.5%

• Uniswap (UNI): +1.1%

Losers:

• XRP (XRP): -2.8%

• Chainlink (LINK): -2.7%
• Stellar (XLM): -2.6%
• Algorand (ALGO): -2.0%

The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.

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Market Moves

by Damanick Dantes, CMT and Frances Yue

Bitcoin Expected to Pause Before Next Rally

Bitcoin buyers are in profit-taking mode as the cryptocurrency tests the $40,000 resistance level. Sentiment has significantly improved over the past week, although some analysts think it’s time for a pause before another leg higher.

Moving average watch

Sentiment can easily shift from bullish to bearish as bitcoin remains in a consolidation phase with strong overhead resistance.

“BTC was already rejected again by its 200-day moving average, just like in early June, but it should try again after a breather, and hopefully not crawling lower than $35K,” Justin Chuh, a senior trader at Wave Financial wrote. 

“If (and when) bitcoin does cross the 200-day, this will signal confidence in the market and demonstrate to many players that the bulls have regained control of the market,” Alexandra Clark, a trader at U.K.-based digital-asset broker GlobalBlock, wrote in an email to CoinDesk.

Bitcoin daily price chart shows resistance at the 200-day moving average (Source: TradingView)

For now, trading activity is sharply higher compared with June. Short-dated call options were actively traded Wednesday morning as bitcoin approached $40,000, according to data from Skew.

Chart shows top BTC options volume for the day (Source: Skew)

GBTC discount narrows

Grayscale Bitcoin Trust (GBTC) shares have narrowed their discount relative to the underlying cryptocurrency held in the fund – possibly a sign that buyers are using the vehicle to bet on the recent recovery rally in digital-asset markets.

The GBTC shares traded at a discount of 6.6% to net asset value (NAV) on Tuesday, the smallest margin since June 22, based on data provided by the crypto derivatives research firm Skew. The discount had widened to 15% in mid-June. 

Some investors may have snapped up GBTC shares in hopes that the discount will evaporate with a bull revival in bitcoin. In that scenario, the buyers would reap any price gains on bitcoin while pocketing extra profit from a narrowing of the discount. (Grayscale Investments, which manages the trust, is a unit of Digital Currency Group, which also owns CoinDesk.)

GBTC discount (Source: Skew)

Ether trading volumes surge

The ether market grew three times faster than the bitcoin market did in the first six months of the year as large investors diversified into the native token of Ethereum’s blockchain, according to crypto exchange Coinbase’s half-yearly review published on Monday.

Ether, bitcoin trading volumes (Source: Coinbase)

Why stablecoins are in the spotlight

Stablecoins have existed for roughly seven years, but talk about them has never been as heated as in recent weeks, not only within the crypto community but also among regulators and traditional market investors. 

Much has been going on the world of stablecoins recently, and some of it can be overwhelming. Here are the three big things happening now:

1. Tether is under a cloud: As the most traded cryptocurrency in the market, USDT has become a backbone for the entire cryptocurrency ecosystem. Over half of all bitcoin trades are made against it. However, Tether, the company behind the digital token, has been plagued by regulatory issues.
   
   
2. Regulatory heat: Stablecoins had a total market capitalization of $116 billion as of Monday, an almost fourfold increase since the start of this year, according to CoinMarketCap. As growth has increased, so has the attention from U.S. and other regulators. 
   
   
3. Circle going public, other stablecoin issuers disclose more info: Circle, the issuer of USDC, the second largest stablecoin, has also been in the spotlight. Circle plans to go public through a merger with Concord Acquisition Corp., a publicly traded special purpose acquisition corporation (SPAC). The deal would value the crypto financial services firm at $4.5 billion. Another stablecoin issuer, Paxos, also released for the first time a breakdown of reserves for its stablecoins, Paxos standard and the Binance-labeled BUSD. Some 96% of the reserves was held in cash and cash equivalents, while 4% was invested in U.S. Treasury bills as of June 30.

Altcoin roundup

• XRP rallies: XRP, a cryptocurrency used by Ripple in its payments network, rallied to a five-week high on Wednesday after the company said it is targeting the $1.8 billion Filipino remittance market. The cryptocurrency changed hands at $0.74 during the European hours, hitting its highest level since June 21 and representing a 13% gain on the day, according to CoinDesk 20 data. 
  
  
• Ether Trading Volume Surges: Ether's trading volume totaled $1.4 trillion in the January-to-June period, a 1,461% rise from $92 billion observed in the first half of last year.
  
  
• Burger King Brazil accepts dogecoin: Burger King Brazil now accepts dogecoin (DOGE) as a payment method to purchase the fast-food chain’s Dogpper, a dog snack. The service has been available since Monday, according to the company’s official website, though users should check the availability of delivery in their region, the company said. Each Dogpper – a dog treat that plays on the name of Burger King’s best-known menu item, the Whopper – costs 3 DOGE. The company recommends purchasing a maximum of five units per order for “availability reasons.” 

Read the original story here:

Market Wrap: Bitcoin Expected to Pause Before Next Rally

The CoinDesk DeFi Index (DFX), benchmarking the investable DeFi sector, is now available for investors watching decentralized finance, the first true "sector" in cryptocurrencies.

It is the latest index by CoinDesk Indexes, the market standard for crypto assets since 2014. The DFX provides a market-cap-weighted benchmark for a representative basket of DeFi-sector cryptocurrencies, composed of assets suitable for long-term holding.

Find out more at coindesk.com/indexes/dfx, or email indexes@coindesk.com. 

Technician's Take

by Damanick Dantes, CMT

Bitcoin Overbought at $40K Resistance; Support at $34K-$36K

Bitcoin (BTC) completed a recovery from Monday’s 10% pullback and is now re-testing the $40,000 resistance level. The cryptocurrency appears overbought, which could trigger some profit taking after a near 25% rally over the past week.

Lower support is seen around $34,000-$36,000, which is the middle of a two-month range.

Bitcoin four-hour price chart shows short-term support and resistance levels with RSI (Source: TradingView)

• The relative strength index (RSI) on the four-hour chart is declining from an extreme overbought reading on Monday. A lower high on the RSI indicates a bearish divergence, which could stall bitcoin’s short-term uptrend.
  
  
• Initial support is seen at the 50-period moving average on the four-hour chart, currently at $36,000. Lower support is around $32,000-$34,000, which could stabilize a pullback.
  
  
• The intermediate-term trend is improving with a significant loss of downside momentum over the past few weeks. Buyers could remain active at lower support levels, although a breakout above $40,000-$45,000 is needed to resume the long-term uptrend.  

Read the original story here:

Bitcoin Overbought at $40K Resistance; Support at $34K-$36K

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BOLO

Be on the look out for some of these upcoming events:

• Before 13:30 UTC (9:30 a.m. ET): 

  • Mastercard (MA) earnings. Est. EPS: $1.75

• 18:00 UTC (2:00 p.m. ET): 

  • FOMC Meeting two-day meeting (July 27-28)

    Press conference at 18:30 UTC (2:30 p.m. ET) with Chair Jerome Powell

     

• 20:00 UTC (4:00 p.m. ET):
  • Amazon (AMZN) earnings. Est. EPS: $12.30

The cryptocurrency movement has never been so sprawling, reaching every corner of the planet.

Crypto State by CoinDesk aims to connect with local communities to explore this movement of financial disruption and how it trickles down to every corner of the globe, from DeFi investment opportunities to alternative ways to transact and store wealth.

We're making virtual stops with audiences in Nigeria, the Middle East and Southeast Asia this year. Register for the Crypto State virtual tour.

ICYMI

In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:

Hester Peirce on SEC’s Response to Sen. Warren, Congressional Bitcoin Bashing, Stablecoins and More

What to make of all the anti-crypto claims and concerns being voiced by U.S. lawmakers this week? U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce joins "First Mover" to discuss her views as the SEC faces Sen. Elizabeth Warren's deadline to answer crypto questions. Also, why are the bitcoin price and the broader market moving up despite the bitcoin bashing in Congress? Henry Elder of Wave Financial joins the markets discussion. Plus, Al Burgio, founder of DigitalBits on Italian soccer club AS Roma's partnership worth $42 million with Zytara Labs.

Latest Headlines

• Robinhood IPO Priced at Lower End of Range, Firm Valued at $32B

  Net proceeds from the sale will go toward working capital, capital expenditures, hiring efforts, customer support services, among others.
  
  

• Think Tank Rand Says Crypto Should Be Included in US-Japan Digital Trade Deal

  It may be the time to reconsider the exclusion of crypto in the 2019 agreement, according to experts from the RAND Corporation.
  
  

• Bank of America Calls CBDCs ‘More Effective’ Than Cash in Research Note
  

  The second largest U.S. bank said that the rise of CBDCs was "inevitable."
  
  

• Fetch.ai Token Whiplashes on Coinbase; Listing Still ‘Groundbreaking,’ Says CEO

  The listing "has a very powerful branding effect on the project," Fetch.ai's CEO Humayun Sheikh told CoinDesk Wednesday.
  
  

• Gone in 30 Seconds: Yield Guild Games’ $12.5M Token Sale Sells Out Fast

  Decentralized gaming startup Yield Guild Games (YGG) sold all 25 million of its native tokens at break-neck speed.
  
  

• Argo CEO Named Interim Chairman With US Share Sale Planned

  Earlier this month the company submitted a draft registration statement to the SEC for the sale of American Depositary Shares.
  
  

• EU-Backed Investment Fund Puts $30M Into Crypto VC Firm’s New $120M Vehicle

  The backing of Fabric Ventures marks the first time a fund affiliated with the European Commission has invested in digital assets.

Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. 

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