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| March 10, 2021 Everything you need to make sense of the crypto markets and beyond Sponsored By: By the CoinDesk Markets Team Edited by Lawrence Lewitinn If you were forwarded this newsletter and would like to receive it, sign up here. Bitcoin (BTC) +1.2% $54,912 Ether (ETH) -0.6% $1,817 (Price data as of Mar. 10 @12:00 UTC) Good morning. Here's what we're writing about: Market Moves by Omkar Godbole: Bitcoin Hits Two-Week High Above $55K Ahead of US Inflation Data Damanick Dantes: Inflation Rate, Closely Tracked by Bitcoin Traders, Probably Accelerated in FebruaryCheck out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker, at 9 a.m. U.S. Eastern time. Today the show will feature guests: Paul Atkins, CEO of Patomak Global Partners Kyle Samani, managing partner of Multicoin Capital Alejandro Machado, co-founder of the Open Money Initiative
MARKET MOVES by OMKAR GODBOLE Bitcoin Hits Two-Week High Above $55K Ahead of US Inflation Data
Bitcoin continues to trade higher, shrugging off impending U.S. inflation data that could amplify fears of an early unwinding of monetary stimulus by the Federal Reserve.
The top cryptocurrency by market value reached a two-week high of $55,822 early on Wednesday, after a five-day winning streak that saw prices claw their way back from below $47,000.
Scheduled for release at 08:30 EST today, the U.S. Consumer Price Index (CPI) is expected to show the cost of living in the world’s largest economy rose 0.4% in February from 0.3% in January. In annualized terms, the CPI is forecast to have risen to 1.7% from 1.4% in January.
The data could influence bitcoin’s price, given the cryptocurrency is considered a hedge against inflation and monetary and fiscal policy imprudence. While a bigger-than-expected jump in inflation would strengthen bitcoin’s long-term bullish case, the cryptocurrency’s immediate reaction could be bearish.
That’s because an above-forecast CPI would validate the narrative that the cocktail of monetary and fiscal stimulus and economic rebound is stoking inflation. That could lead to an early tightening of stimulus by the Fed and another leg higher in Treasury yields and the U.S. dollar.
Treasury yields spiked in the last week of February, lifting the dollar and pushing bitcoin and stocks lower, as investors priced in the likelihood of the Fed’s first interest rate hike occurring at the end of 2022 rather than 2024 in the wake of rising inflation expectations and signs of economic recovery.
In other words, the markets were expecting some pickup in inflation two weeks ago. As such, bitcoin and other assets may not see much price action if the growth in the CPI matches estimates.
From a technical analysis standpoint, the cryptocurrency is looking bullish, having cleared a key price hurdle.
Bitcoin daily prices with 5- and 10-day moving averages (Source: TradingView)
Bitcoin has flipped resistance at $52,666 (March 3 high) into support.
The MACD histogram, an indicator used to gauge trend strength and trend changes, has risen back above zero, indicating a bull revival. The 5- and 10-day price averages are again trending north, indicating a bullish setup.
The immediate resistance is seen at $58,332 (record high), followed by the psychological level of $60,000.
Support at $50,000 may come into play if the CPI beats estimates by a big margin, unsettling traditional markets.
At press time, bitcoin is changing hands near $54,790, representing a 1.6% gain on a 24-hour basis. The 10-year yield is seen at 1.56%, having risen by more than 50 basis points to above 1.6% in the past five weeks. Elsewhere, the S&P 500 futures are up 0.30%. --Omkar Godbole
Read the original story here: Bitcoin Hits Two-Week High Above $55K Ahead of US Inflation Data
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OTHER MARKETS NEWS by DAMANICK DANTES Inflation Rate, Closely Tracked by Bitcoin Traders, Probably Accelerated in February When Federal Reserve Chairman Jerome Powell downplayed the threat of rising inflation last week, market participants saw the opposite: The recent rise in 10-year U.S. Treasury-bond yields and so-called breakeven rates – a gauge of inflation expectations – reflects growing enthusiasm over economic growth prospects but also anxiety over the potential for accelerating price increases.
The matter is crucial to bitcoin traders, since the largest cryptocurrency is seen by a growing number of investors as a potential hedge against higher prices after the Fed pumped trillions of dollars of freshly created money into financial markets over the past year, a form of monetary stimulus for the coronavirus-racked economy.
On Wednesday investors will get the latest reading on price pressures when the U.S. Bureau of Labor Statistics publishes its February Consumer Price Index (CPI) report. The rise in yields reflects market expectations for higher growth and inflation. (Source: St. Louis Fed) Economists and analysts on average project that the headline CPI probably rose 1.7% over the past 12 months, accelerating from the 1.4% pace reported last month January, according to FactSet.The core CPI, which excludes food and energy prices, probably rose 1.4% from a year earlier, the same pace as in January. While those rates are still considered low, expectations for future inflation have been on the rise. Consumer inflation expectations for the year ahead have edged up to 3%, the highest since July 2014, based on a February household survey conducted by the Federal Reserve Bank of New York. "Inflation risks are skewed to the upside," according to a Deutsche Bank research report published March 7. The rapid rise in inflation-adjusted yields on U.S. Treasury bonds presents risk of an unwanted tightening of financial conditions, which might present a challenge to markets, according to Deutsche Bank: "We see limited scope for the market to further accelerate the timing of monetary tightening for the time being." --Damanick Dantes Original story found here: Inflation Rate, Closely Tracked by Bitcoin Traders, Probably Accelerated in February
BIGGEST MOVERS These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: Bitcoin (BTC): +1.2%
Losers: Tezos (XTZ): -5.7% OMG Network (OMG): -4.7% Kyber Network (KNCY): -4.7%
The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.
ICYMI In case you missed it, here is yesterday's episode of First Mover: Capitalizing on DeFi, Institutional Interest In NFTs and Goldman Sach’s Latest Bitcoin Report People don't get bitcoin but they get DeFi. That's how Bitwise explains interest in its decentralized finance index fund that brought in over $30M in sales in just two weeks. Learn more from Bitwise's Matt Hougan. And, will the National Credit Union Administration be the next federal regulator to provide crypto guidance? Kyle Hauptman, NCUA vice chairman joins us. Plus, Trustology CEO Alex Batlin on NFTs. Will Institutions join the party?
LATEST HEADLINES Grayscale, Firm Behind Leading Bitcoin Trust, Is Hiring ETF Specialists Nine new job postings indicate Grayscale is considering joining the race to win the SEC’s first bitcoin ETF approval. Multiple Crypto-Related Twitter Accounts Have Been Suspended No explanation for the suspensions has been given aside from the fact the accounts violate Twitter's rules.
Nigeria Is Now Rewarding Citizens for Using Licensed Money Senders, Not Crypto The "Naira 4 Dollar Scheme" is a bid to funnel remittances through official channels. Meanwhile, peer-to-peer bitcoin remains popular.
Crypto Lending Platform BlockFi Attacked With Flood of Fake, Abusive Sign-Ups The malicious spree involved offensive language being placed in the first and last name fields on the account registration page.
India’s Internet and Mobile Association Calls for Crypto Regulation, Not Ban The association said India could benefit from a "robust" regulatory regime for digital assets.
Bankrupt Crypto Lending Platform Cred Had UK Fugitive in Charge of Funds James Alexander was employed as the CCO of Cred, a crypto lender which filed for bankruptcy in November 2020.
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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. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is.
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