Bitcoin Takes a Breather

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 27, 2021

Sponsored by

Bitcoin (BTC)

-2.2% $37,656

Ether (ETH)

-4.5% $2,248

(Price data as of July 27 @11:00 UTC)

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

Deep negative real returns on bonds tend to boost the attractiveness of other assets.

Bitcoin is in pullback mode with lower support near $32K-34K.

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

– Lawrence Lewitinn

Biggest Movers

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

Gainers:

None of the assets in the CoinDesk 20 is up today.

Losers:

Aave (AAVE): -8.8%

Polkadot (DOT): -5.8%

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 Omkar Godbole

Bitcoin Takes a Breather as Stocks Drop, Inflation-Adjusted Bond Yields Hit Record Low

After rallying for five consecutive days, bitcoin (BTC) is taking a breather alongside a dour mood in traditional markets.

The top cryptocurrency is changing hands near $37,000 at press time, having failed to hold Monday’s gains above $40,000, according to CoinDesk 20 data. Prices pulled back after e-commerce giant Amazon flatly denied speculation it was adopting bitcoin as a payments alternative.

Asian stocks hit the lowest point of the year early Tuesday as shares in Chinese internet companies lost more ground owing to the regulatory crackdown. Major European markets are also flashing red, and the futures tied to the S&P 500 are down 0.53%.

BTC/USD prices, July 25-26, 2021 (Source: CoinDesk)

According to some observers, bitcoin and cryptocurrencies are at the far end of the risk curve. So, a worsening of risk aversion in traditional markets would be bearish for cryptocurrencies.

However, recent price action suggests bitcoin sellers have run out of steam. The cryptocurrency traded higher on Monday even after Bloomberg reported that the U.S. Department of Justice is investigating Tether, the issuer of the largest stablecoin tether (USDT), for possible bank fraud.

Bitcoin has managed to hold on to the $30,000 support in recent weeks despite increased regulatory scrutiny of Binance, the world’s largest crypto exchange by volume, persistent concern about stablecoins, and China’s ban on mining.

FLASHBACK: BTC/USD prices, October, 2020 (Source: CoinDesk)

The market activity is reminiscent of the resilience observed in early October 2020. Back then, bitcoin remained bid above support at $10,000 despite multiple exchange hacks, and a BitMEX lawsuit. The cryptocurrency went on to hit record highs above $20,000 in December.

Another factor favoring an upside in asset prices is the renewed decline in inflation-adjusted bond yields. The real yield on 10-year U.S. Treasuries sank to a record low -1.11% on Monday – down 51 basis points from the February peak of -0.60%. According to the Financial Times, real yields in the euro region also traded at all-time lows on Monday.

Deep negative real – or inflation-adjusted – returns on bonds tend to boost the attractiveness of other assets. For instance, assets from equities to gold and cryptocurrencies saw unprecedented rallies in the 12 months through March 2021 as real yields collapsed and central banks pumped trillions of dollars worth of liquidity into the system in the aftermath of the March 2020 crash.

This time, the bullish impact of the decline in real yields may be tempered by growth fears and central banks looking to scale back stimulus. “There was a big liquidity push back then, but now central banks are thinking of doing the opposite, and there are some growth concerns,” David Belle, founder of Macrodesiac.com and growth director at TradingView, said. “So the macro environment is different than the one seen after March 2020.”

Read the original story here:

Bitcoin Takes a Breather as Stocks Drop, Inflation-Adjusted Bond Yields Hit Record Low

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 Declines from $40K Resistance; Support at $34K

Bitcoin (BTC) had a sharp 10% pullback after approaching the $40,000 resistance level on Monday. The cryptocurrency is holding initial support above $36,000 at press time and is up about 25% over the past week.

Lower support is seen around $34,000 which could stabilize the current pullback.

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

Read the original story here:

Bitcoin Declines from $40K Resistance; Support at $34K

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BOLO

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

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:

Bitcoin Jumps to a Six-Week High, Actress Mila Kunis on NFT-Backed Animated Series

"First Mover" dives into the crypto markets and the latest market action, including the reasons for bitcoin's sharp rise as the price eyes $40K. Joining the markets discussion is Ben Flavin, Global Head of ETFs at BNY Mellon, who also shares news of the latest bank and institutional moves into crypto. Also, host Christine Lee sits down with Mila Kunis to discuss the animated, NFT-backed series featuring the actress, her husband Ashton Kutcher and Vitalik Buterin.

Latest Headlines

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The filing joins over a dozen crypto ETF applications sitting before the SEC.

Argentinian Crypto Exchange Lemon Raises $16M to Expand in Latin America

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Bug Found in Decoy Algorithm for Privacy Coin Monero

"This does not reveal anything about addresses or transaction amounts ... This bug persists in the official wallet code today," said Monero.

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The company said it's an old entity that isn't in use anymore.

Justin Sun Hints at Retirement, Joins Research Project at Communist Party School

Justin Sun flaunted his new partnership with the CCP on social media.

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The pilot will use simulated crypto assets and paper money to give invited investors a sample of Bullish's trading interface.

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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