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| 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 May 13, 2021 Sponsored by Bitcoin (BTC) -12.8% $49,198 Ether (ETH) -15.1% $3,638 (Price data as of May 13 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
Good morning. Here's what we're writing about: Market Moves: Bitcoin Makes Weak Bounce After Tesla Blow But Pullback May Not Be Over: AnalystTechnician's Take: Bitcoin Sell-Off Could Stabilize Around $42K Support
Check 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: Jay Hao, OKEx CEOKyle Samani, Multicoin Capital Co-Founder & Managing Partner Matt Hougan, Bitwise CIO
Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: Cardano (ADA): +3.3% Aave (AAVE): +0.9%
Losers: EOS (EOS): -20.9% Filecoin (FIL): -18.9% Bitcoin Cash (BCH): -18.9% Litecoin (LTC): -17.9%Yearn Finance (YFI): -17.1% Ether (ETH): -15.1% XRP (XRP): -15.1% Stellar (XLM): -15.1% Tezos (XTZ): -14.0%The Graph (GRT): -14.0% Chainlink (LINK): -13.8%Bitcoin (BTC): -12.8% NuCypher (NU): -11.5% Uniswap (UNI): -8.5% Algorand (ALGO): -7.2% Polkadot (DOT): -3.6%
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.
Market Moves by Omkar Godbole Bitcoin Makes Weak Bounce After Tesla Blow But Pullback May Not Be Over: Analyst
Performance of yearn.finance (green) and eos (blue) on Coinbase so far in 2021 (Source: TradingView)
While bitcoin has rebounded somewhat from 10-week lows seen early Thursday, analysts say the relief could be short-lived.
The leading cryptocurrency by market value is changing hands near $48,700 at press time, having printed a low of $46,294 during the Asian hours. That was the lowest price since March 1, according to CoinDesk 20 data.
The drop to multi-week lows happened after Tesla's CEO Elon Musk announced on Twitter that the electric car maker has suspended BTC payments for its vehicles over the environmental cost of mining.
Despite the latest recovery, bitcoin is still down 10% on a 24-hour basis and trading at least 25% lower from record highs above $64,000 reached in mid-April. Bitcoin prices, May 12 - May 13, 2021 (Source: CoinDesk) According to Joel Kruger, currency strategist at LMAX Digital, the possibility of a deeper correction cannot be ruled out.
"Fundamentally, the risk-off in markets could have a weighing influence," he said.
Global financial markets have turned risk-averse in the past 24 hours on fears that the Federal Reserve may scale back stimulus sooner than expected to contain inflation, and the dour mood looks set to continue.
The central bank's massive monetary easing efforts have been primarily responsible for the unprecedented risk-taking seen across all corners of the financial market over the past 12 months.
The Fed reduced rates to a record low of 0.25% a year ago and has been buying bonds worth $120 billion per month to support the economy and markets amid the coronavirus pandemic. Bitcoin has charted a five-fold rally since April 2020.
However, with inflation running hot, the U.S. central bank now looks to be running out of ways to keep the liquidity tap flowing.
Official data released Wednesday showed the U.S. consumer price index (CPI), which measures a basket of goods and energy and housing costs, rose 4.2% year-on-year in April, marking the fastest inflation rise in 12 years.
Bitcoin fell from $55,000 to $53,000 after the data was revealed and extended losses following Musk's tweet. U.S. stocks also suffered sharp losses and look set to begin Thursday on a negative note, as futures tied to the S&P 500 are trading 0.5% lower at press time.
Data from the rates markets shows traders are ratcheting up the odds of an interest rate hike in 2022 in response to high inflation. According to Bloomberg, eurodollar futures contracts are now pricing in more than an 80% likelihood of a quarter-point rate hike by the end of 2022, up from a two-in-three chance at the beginning of the week.
Thus, the immediate prospects for bitcoin and other asset classes look bleak. "If the rate hike expectations do not subside, market participants will be keenly looking for any evolution of trends surrounding central bank liquidity and whether bitcoin flows actually benefits from higher inflation," Vinokourov said. "For all the talk of bitcoin being a hedge against inflation, up to now its existence was in a very low-inflation environment."
Technical charts also suggest scope for a deeper pullback for bitcoin.
"The monthly relative strength index is still showing highly overbought conditions, and this latest breakdown below what had been support at $47,000 now exposes the possibility for a measured move downside extension back into the $34,000 area," Kruger said. Read the original story here: Bitcoin Makes Weak Bounce After Tesla Blow But Pullback May Not Be Over: Analyst
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Technician's Take by Damanick Dantes Bitcoin Sell-Off Could Stabilize Around $42K Support Sellers remained active on Wednesday as bitcoin (BTC) dropped below $50,000 after Tesla halted acceptance of payments for new vehicles in the currency.
The cryptocurrency was trading around $49,400 at press time and could find lower support around $42,000.
Long-term momentum continues to weaken during several months of consolidation. BTC remains under pressure after reaching the upper bound of a three-year price channel.
Four-hour bitcoin chart shows support and resistance levels with RSI (Source: TradingView) The relative strength index (RSI) on the four-hour chart is oversold similar to April 25 which preceded a price recovery.However, the RSI is not yet oversold on the daily chart. This means bitcoin could trade lower towards $42,000 support. Bitcoin returned below the 100-day moving average which created resistance around $53,600. Over the short-term, higher volatility and frequent drawdowns could discourage buyers. For now, the long-term trend remains intact above $42,000. Original story found here: Bitcoin Sell-Off Could Stabilize Around $42K Support
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BOLO Be on the look out for these upcoming events: Earnings: Hut 8 Mining (HUTMF). Coinbase (COIN) - After market close 20:00 UTC (4:00 p.m. ET) 12:30 UTC (8:30 a.m. ET):Initial jobless claims. Forecast: 500,000
A message from CoinDesk Unlocked 101 at Consensus by CoinDesk 2021
The countdown is on to Consensus by CoinDesk, our virtual big-tent event this May.
For those who need a primer or to brush up on the fundamentals, we're hosting Unlocked 101, a free educational series designed to give you the tools you need to navigate crypto.
Sessions run May 4–20, covering the basics of Bitcoin, DeFi, scams and hacks and the NFT boom.
ICYMI In case you missed it, here's the most recent episode of "First Mover" on CoinDesk TV:
What Consumer Prices Rising By 4.2% Means for Crypto The Consumer Price Index (CPI) report for April, released Wednesday morning, is raising concerns about inflation. This news breaks as crypto prices were already rising, perhaps in anticipation of the higher-than-expected CPI. Mark Yusko of Morgan Creek joins our markets discussion. Also, MoneyGram Chairman and CEO Alexander Holmes discusses how the global money transfer company is starting to provide access to bitcoin. And Jack Zampolin of the Cosmos Network explains the project's goal to get blockchains to work together.
Latest Headlines Huobi Group’s Investment Arm Dedicates $100M to DeFi, Mergers Huobi Ventures will consolidate the firm's investment strategy. Microsoft to Shutter its Azure Blockchain Service This Autumn Microsoft is recommending users migrate to the Quorum Blockchain Service from ConsenSys. South Korea’s Central Bank Seeks Authority to Monitor Crypto Transactions: Report The Bank of Korea hopes to start as early as September, an official said. Bitcoin’s Mining Difficulty Hits New High; Taproot Begins Its Second Signaling Attempt Bitcoin's price may be taking a dip, but its mining difficulty has never been higher. Former BitMEX Executives to Face Trial in March 2022 Arthur Hayes, Benjamin Delo, and Samuel Reed face up to five years in prison per charge if convicted. IRS Will Seize Crypto Assets on Failure to Pay U.S. Taxes: Official Crypto is treated by the IRS as property for U.S. tax purposes and can be seized in the same way, an official said.
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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