Aug. 7, 2024

CoinDesk 20 Index: 1,869  +4.9% 
Bitcoin (BTC): $57,145  +3.5% 
Ether (ETC): $2,482  +0.9% 
S&P 500: 5,240.03  +1.0% 
Gold: $2,438  +2.1% 
Nikkei 225: 35,089.62  +1.19% 

A message from Radix

Cryptocurrencies continued their recovery from Monday's crash, with bitcoin trading above $57,000, over 4% higher in the last 24 hours. Bank of Japan deputy governor Shinichi Uchida said that the central bank would not hike borrowing costs, which may have provided some relief for investors of risk assets such as crypto. "As we're seeing sharp volatility in domestic and overseas financial markets, it's necessary to maintain current levels of monetary easing for the time being," Uchida said in a speech to business leaders in Hakodate, Hokkaido. The broader crypto market, measured by the CoinDesk 20 Index (CD20), has risen over 5%, with SOL continuing to lead the gains. The altcoin has regained the $150 mark, on the back of climbing nearly 10%. 

Memecoins from the Solana ecosystem surged more than 30% in the past 24 hours, leading gains in the crypto market, as the network’s underlying token SOL, recovered from losses earlier in the week. Cat-themed popcat (POPCAT) and dog token dogwifhat (WIF) surged as much as 25%, before slightly retreating, while smaller tokens MUMU and catdog (CATDOG) rose 30%, data show. Major memecoins on other blockchains, such as DOGE and PEPE, lost as much as 5%. Solana network volumes more than doubled to over $3.3 billion from Monday’s $1.5 billion, banking in fees of at least $750,000 per day, DefiLlama data shows.

Crypto asset manager CoinShares recorded profits after tax of around $513.1 million in Q2, a considerable bump from $12.7 million in the equivalent quarter a year ago. The firm also noted a loss of $481.4 million on the fair value of digital assets, as the crypto market pulled back from its all-time high levels of Q1. Once accounted for this depreciation, CoinShares' comprehensive income for the quarter was $32.6 million, almost five-times the figure for Q2 2023 of $6.3 million. The firm saw its asset management fees more than double to $28.45 million, helped by its acquisition of the ETF unit of Valkyrie, which gave CoinShares a U.S. arm to its ETP business.

It appears bitcoin's impending death cross, a bearish technical pattern, will again live up to its reputation as a contrary indicator, presaging renewed bullish price action as it did in September 2023.

This is thanks to the comments of the BoJ governor, ruling out interest rate increases while the markets are unstable.

Other things being equal, BOJ's latest comments mean limited downside in the cryptocurrency even as the death cross, characterized by the cryptocurrency's 50-day simple moving average (SMA) moving below the pivotal 200-day SMA, looms.

Bitcoin traded firm following Uchida's comments, briefly topping the $57,300 mark as the Japanese yen (JPY) depreciated to 148 per U.S. dollar (USD) from 145 per USD. Japan's equity index, Nikkei, rose 4%, signaling a risk reset, and futures tied to the S&P 500 rose 0.8%.

"The BOJ struck the 'Yen put,' and the Nikkei will be driving the Nasdaq and S&P to their pre-selloff levels," pseudonymous market observer Global Macro said on X.

- Omkar Godbole