The latest moves in crypto markets, in context April 1, 2022 Supported by |
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Good morning, and welcome to First Mover. Here’s what’s happening this morning: - Market Moves: Bitcoin sees exchange inflows. The U.S. economy added fewer jobs in March amid recession fears.
- Featured Story: Bitcoin's recent rally is characterized by persistent flat-to-negative perpetuals funding rates, a sign of low risk appetite in the market.
Today’s newsletter was edited by Omkar Godbole and produced by Parikshit Mishra. And check out the CoinDesk TV show “First Mover,” hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. - Jason Guthrie, head of digital assets, Europe, WisdomTree
- Rep. Stephen Lynch, Massachusetts (D)
- Jim Jones, rapper and entrepreneur
- Rob Richardson, CEO, Disrupt Art
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Cryptocurrencies traded under pressure after the EU Parliament approved a bill targeting "unhosted wallets" – software/hardware facilitating holding, storage and transfer of crypto, which is not hosted by a third party, such as a financial institution or a credit service provider. Under the new regulation, exchanges would have to do a KYC of owners of unhosted wallets. The committees will vote on the "Transfer of Funds Regulation" on Friday. Bitcoin dipped to $44,300 before recovering to $45,000, tracking the uptick in U.S. stock futures. Blockchain data tracked by IntoTheBlock showed that $200 million worth of bitcoin was deposited into centralized exchanges in seven days. Investors usually transfer coins to exchanges when intending to liquidate their holdings. However, institutional activity was bullish, with exchange-traded funds registering an inflow of 4,469 BTC last week, pushing the total holdings to a new lifetime high, according to ByteTree Asset Management. Data released at 12:30 UTC showed the U.S. economy added slightly fewer jobs than expected in March amid soaring inflation and recession fears. Nonfarm payrolls expanded by 431,000 for the month, missing the forecast of 490,000, while the unemployment rate dropped to 3.6%, the Bureau of Labor Statistics reported. Average hourly earnings, a closely watched inflation metric, increased 0.4% on the month and 5.6% on the year. "A strong labor market could cause a short-term drawdown in bitcoin due to a potential rise in the dollar and pressure on equity markets. However, rising U.S. incomes are a positive signal for cryptocurrency in the longer term," Alex Kuptsikevich, senior financial analyst at FxPro, said in an email. "It increases demand for it when we see an increasing pull to hedge our savings against inflation. Still, bonds and equities remain overvalued for current conditions," Kuptsikevich added. |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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There are no gainers in CoinDesk 20 today. |
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Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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Bitcoin's Risk-Off Rally By Omkar Godbole |
Bitcoin's recent rally from $38,000 to $45,000 is characterized by an absence of exuberance among perpetual futures traders, a sign of lesser risk appetite in the market. The average perpetual funding rate or the cost associated with holding long or short perpetual futures on prominent crypto exchanges Binance and Bybit remains under zero, signaling a neutral-to-bearish bias. "Funding rates on Binance and Bybit have now been neutral to below neutral for 118 consecutive days," Vetle Lunde, market analyst at Arcane Research, told CoinDesk in a WhatsApp chat. "This illustrates the long-lasting poor sentiment in the market, and accompanied by the low futures basis [single-digit premium], it's pretty clear that the demand to add long exposure is, and has been, low for a prolonged duration." A positive and rising funding rate means leverage traders are making bullish bets, a sign of risk-on sentiment. Meanwhile, a negative funding rates means leverage is skewed bearish. |
Bitcoin perpetual funding rates on Binance and Bybit (Arcane Research.) |
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The low participation from derivative traders is perhaps a good sign as it means the cryptocurrency is less vulnerable to sudden and sharp price drops, called leverage washouts. Bull run in early stages The spread between the front month and the next month futures contracts trading on the Chicago Mercantile Exchange (CME) remains locked in the $0 to $205 range, which has historically been the case during the early stages of the rally. Parabolic runs that kicked off in early October 2021 and December 2021 coincided with the spread moving well above $205. On the contrary, tightening of the spread to zero has marked significant bottoms in the past. |
Bitcoin: Spread between the front-month and next-month CME futures contracts (TradingView, CoinDesk.) |
Introducing Market Wrap, our daily newsletter that explains what happened today in the crypto markets — and why. Sign up to get the first edition in your inbox on April 4. |
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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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