The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. |
|
|
Good morning, and welcome to First Mover. Here’s what’s happening this morning: - Market Moves: Macro headwinds continue to push bitcoin lower. A popular indicator suggests institutions are selling into a falling market. Two charts offer hope to battered bitcoin bulls.
And check out the CoinDesk TV show “First Mover,” hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. - Steven McClurg, CIO and co-founder, Valkyrie
- Cory Klippsten, CEO, Swan Bitcoin
- Maxim Galash, CEO, Coinchange
Today’s newsletter was edited by Omkar Godbole and produced by Parikshit Mishra. Let us know what you think by replying to this email. |
|
|
Market Moves By Omkar Godbole |
|
|
It’s a new week but the same old story in financial markets. The U.S. dollar is again trading higher as macro headwinds weigh over stocks, bonds and cryptocurrencies. Bitcoin, the top cryptocurrency by market value, traded at a 3.5-month low of $33,080 at press time, representing a 3% drop on the day, according to CoinDesk data. "Investors are clearly concerned about the aggressive monetary policy from the Federal Reserve, as they will also begin Quantitative Tightening (removal of liquidity from the market) in June," Marcus Sotiriou, analyst at the U.K. based digital asset broker GlobalBlock, said in an email. Institutional Selling Popular indicator suggest institutions are selling into a falling market. The "Coinbase premium index," an indicator showing the spread between Coinbase's BTC/U.S. dollar (USD) pair and Binance's BTC/USDT pair involving the tether stablecoin, recently turned negative and fell to a 12-month low, according to data tracked by South Korea-based Cryptoquant. "This [negative Coinbase premium] is telling as a greater percentage of institutions use Coinbase compared to retail, whereas the opposite is the case for Binance. Therefore, the price mismatch mentioned suggests institutions are not currently as interested as retail," Sotiriou said. "This will be good to keep an eye on going forward and if/when this reverses it could coincide with some relief in the market or a reversal." CryptoQuant said in a quicktake blog, "Usually, there is a Coinbase premium. This means that the bitcoin price on Coinbase is higher than on Binance. This was/is very important, because American institutions and HNW (High Net Worth) were trading mostly on Coinbase. However... in the latest few days it's negative. This indicates heavy selling on Coinbase Pro!" |
Bitcoin's Coinbase premium index (CryptoQuant) |
|
|
Terra jitters Programmable blockchain Terra's UST, the world's biggest decentralized stablecoin, lost its 1:1 dollar peg over the weekend after multi-million dollar UST sales on Curve and Binance and a series of significant withdrawals from Anchor Protocol, a lending market offering high yields to UST depositors. The de-pegging perhaps added to the downward pressure on bitcoin and the wider crypto market. "People become afraid that the Luna Foundation Guard [LFG] would have to sell its BTC to support the UST peg, so BTC sells off," Ilan Solot, a partner at the Tagus Capital Multi-Strategy Fund, said in an email. "Remember that Terra foundation is the second-largest corporate holder of BTC, between MicroStrategy and Tesla," Solot added. The stablecoin was 0.5% off its peg at the time of writing. Terra's founder Do Kown tweeted early Monday that the LFG agreed to deploy $1.5 billion in capital to defend the peg while assuring the market that the foundation was not trying to abandon its bitcoin position. Some 'hopium' Amid the gloom and doom, two charts could offer some "hopium" – a crypto slang for hope – to the battered bitcoin bulls. The first is bitcoin's implied volatility (IV) – options traders' expectations for price turbulence over a specific period. The one-week implied volatility has risen above the six-week gauge, a sign of peak fear. A similar IV structure has marked temporary/interim price bottoms in the past. |
Bitcoin's one-week and six-month IV (Skew, CoinDesk) |
Secondly, the dollar index's (DXY) technical chart shows the 50-month moving average is on track to move above the 200-month MA, confirming the so-called bullish crossover. While the golden cross is a bullish indicator, as per technical analysis theory, it is a lagging indicator in reality and often traps traders on the wrong side of the market. In other words, the DXY could be closing on an interim top. The dollar weakness is considered positive for risk assets, including cryptocurrencies. |
Investors, you deserve a Spot Bitcoin ETF Since its inception in 2013, Grayscale has never stopped working towards converting Grayscale Bitcoin Trust (symbol: GBTC) to a Bitcoin ETF. If you support the conversion, write to the SEC by clicking here. Your submission matters because: We can level the playing field. To date, the SEC has only permitted Bitcoin Futures ETFs, while rejecting “physically-backed” or Spot Bitcoin ETFs. The choice should be yours. If you’ve been waiting for the familiarity and protections of a Bitcoin ETF, we believe you should not be forced into a Futures-based product simply because it’s the only one that exists. You can help take GBTC to the next level, conversion to an ETF. It’s already the world’s largest Bitcoin fund and regularly reports to the SEC on a voluntary basis as an SEC-reporting company. Learn more here. This information should not be relied upon as investment advice or a recommendation regarding any security. Visit here for important disclosures. |
|
|
The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
|
|
Biggest Gainers There are no gainers in CoinDesk 20 today. Biggest Losers |
|
|
Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
|
|
Hex Trust is a fully licensed digital asset custodian for financial institutions and organizations. Our bank-grade platform Hex Safe™ integrates top emerging blockchains, token standards, and licensed custody services for NFTs and metaverse assets. - Institutional-grade infrastructure: providing the highest standards of protection, scalability, and compliance
- Monetize digital assets: accessing DeFi, staking, and other on-chain services
- Enter the metaverse: integrating NFTs in your business operations safely
Unlock the full potential of your digital assets. Get started |
|
|
Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price. |
|
|
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. |
|
|
|
