The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk News Reporter Was this newsletter forwarded to you? Sign up here. |
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It's Thursday! Here’s what you need to know in crypto today. |
- Bitcoin returns to $61,000 following Wednesday's dip.
- Dollar index rises to highest level since Aug. 16, weighing on BTC.
- Ether ETFs recorded zero flows for the second time this week on Wednesday.
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CoinDesk 20 Index: 1,887.55 -1.61%
Bitcoin (BTC): $61,068.94 -1.66%
Ether (ETH): $2,398.48 -1.49%
S&P 500: 5,792.04 +0.71%
Gold: $2,617.57 +0.35%
Nikkei 225: 39,380.89 +0.26% |
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Bitcoin nursed losses during the European morning, trading about 1.6% lower over 24 hours even after returning to $61,000 following a dip to as low as $60,300 late on Wednesday. The broader crypto market has fallen 2%, as measured by the CoinDesk 20 Index. Attention will turn to September's CPI report out of the U.S. later Thursday, which is expected to show increases of 0.1% month-on-month and 2.3% year-on-year. Hotter-than-expected prints could strengthen calls to stop interest-rate cuts, which would likely weigh on risk assets such as cryptocurrencies. |
The minutes from the September Fed meeting, released Wednesday, showed policymakers were divided on how aggressive the central bank should be. "A substantial majority of participants" favored cutting the interest rate by half a percentage point, though some expressed misgivings about going that large, the minutes said. "Crypto sentiment has moved back into the fear zone (39), reinforcing the contrast with 72 (greed) in equities," said Alex Kuptsikevich, a senior analyst at FxPro. "This dynamic is easily explained by the appreciation of the dollar and the increased attractiveness of bonds, which reduces institutional traction in bitcoin." The dollar index (DXY), rose to 102.97, the highest since Aug. 16, taking the cumulative gain since the Sept. 30 low of 100.18 to 2.7%, according to data source TradingView. Ether ETFs in the U.S. registered zero flows in either direction on Wednesday, according to data compiled by SoSoValue. This is the second time this week the funds have seen no activity and the third time since they listed in July. That leaves net outflows since their debut at $562 million, in contrast to their bitcoin equivalents, which have drawn net inflows of nearly $19 billion since January. Bitcoin ETFs saw outflows of over $30.5 million on Wednesday. It was a fairly muted day for them too, with nine of the 11 funds registering zero flows in either direction. |
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Market Insight: Uptrend in Bitcoin's Dominance Rate Threatened by Fed Rate Cut Cycle |
The Fed's rate-cutting cycle may stall the prolonged uptrend in bitcoin's dominance rate, bringing wider gains in the crypto market, according to crypto asset manager SwissOne Capital. BTC's dominance rate, or the cryptocurrency's share of the total market capitalization, has increased to 58% from 38% in two years, according to data source TradingView. There is now limited scope for further upside as the Fed recently cut interest rates by 50 basis points, kicking off a so-called easing cycle, according to SwissOne Capital. "Bitcoin Dominance is positively correlated to the Fed Funds rate," SwissOne Capital said in a market update, noting the decline in dominance during the previous rate-cutting cycles. The positive correlation between the two was also evident through the 2022-23 and 2018 rate-hike cycles. "The recent start of the U.S. rate cutting cycle certainly points to little further upside if history is to repeat itself," SwissOne Capital noted. |
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- Bitcoin's seven-day options skew has slipped to -8.5%, the lowest in four weeks.
- The negative print indicates a bias for protective put options, reflecting fears of downside price risks.
- Source: Amberdata, Deribit
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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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