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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 3 2021 Sponsored by Bitcoin (BTC) +2.7% $58,573 Ether (ETH) +7.0% $3,137 (Price data as of May 3 @12:40 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: Ether’s Price Rally Above $3.2K Appears Spot-Driven, Boding Well for Further GainsTechnician's Take: Bitcoin Holds Support, Faces Resistance Around $60K
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: J. Christopher Giancarlo, U.S. Commodity Futures Trading Commission Chairman EmeritusDavid Treat, Accenture Senior Managing Director Martin Gaspar, CrossTower Research Analyst Nikil Viswanathan, Alchemy Co-Founder & CEO
Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: Ether (ETH): +7.0% Stellar (XLM): +6.4% Algorand (ALGO): +5.3%
Losers: None of the CoinDesk 20 digital assets is down today.
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 Ether’s Price Rally Above $3.2K Appears Spot-Driven, Boding Well for Further Gains
Ether (ETH) has soared above $3,200 less than 12 hours after breaking above the psychological hurdle of $3,000 for the first time ever.
The second-largest cryptocurrency traded at a record price of $3,201 right before press time, taking the year-to-date gain to over 330%, according to CoinDesk 20 data.
Analysts say increased buying the spot market is propelling the native token of Ethereum’s blockchain higher.
“Ethereum’s funding rates remain flat and went negative early today on FTX,” Matthew Dibb, COO, and co-founder of Stack Funds, said. “Our view is that the spot-driven rally for ETH is primarily due to excitement around the impending EIP 1559 upgrade.”
The funding rate, calculated and paid every eight hours, refers to the cost of holding long positions in perpetuals (futures with no expiry). A high funding rate implies increased buying in the derivatives market, which doesn’t appear to the case with ether right now. Ether perpetual funding rate (Source: Glassnode) The average funding rate across major exchanges is barely holding above zero at press time, meaning the derivatives segment is far from overheated and the buying pressure is mainly stemming from spot markets.
An overheated derivatives market typically leads to sudden price pullbacks similar to ones seen in January and mid-February after the funding rate reached highs above 0.15%.
According to Swiss-based derivatives data provider Laevitas, the breakout above $3,000 could be long-lasting. “Despite ether flying past $3,000, funding rates are completely flat. So this certainly feels like a sustainable spot-led rally,” Laevitas tweeted early Monday.
Some investors look to be betting on a continued rally toward $5,000. Among all the options listed on the dominant crypto exchange Deribit, the most common open position is the $5,000 call, data shared by the options analytics platform Laevitas shows.
Ether: open interest by strike (Source: Laevitas) The total open interest in the $5,000 call is 69,000 contracts at press time. Of that, 15,970 are due to expire at the end of May and 18,400 at the end of June.
A call option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. In plain English, a call option is a bullish bet.
The bullish sentiment likely stems from analysts predicting a considerable drop in ether’s annual issuance following the EIP 1559 upgrade – a proposal to change Ethereum’s fee structure, also known as “Ethereum’s scarcity engine” or “ETH’s burn mechanism”.
That said, the options market currently sees less than a 10% probability of ether ending the second quarter above $5,000, according to data source Skew. The cryptocurrency remains vulnerable to the effects of sharp bitcoin (BTC) price pullbacks.
Read the original story here: Ether’s Price Rally Above $3.2K Appears Spot-Driven, Boding Well for Further Gains
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Technician's Take by Damanick Dantes Bitcoin Holds Support, Faces Resistance Around $60K Bitcoin (BTC) held support around $56,000 over the weekend and was trading around $58,700 at the time of writing. The next resistance level around $60,000 is within reach. Hourly bitcoin chart shows support and resistance levels with RSI (Source: TradingView) The relative strength index (RSI) is now overbought on the hourly chart, although not as extreme as May 1 or April 14 which preceded price declines.Bitcoin is holding support at the 100-period moving average on the hourly chart. The moving average has been sloping upwards for about a week which points to an improving short-term trend. On the daily chart, bitcoin is also above the 50-day and 100-day moving averages and is not yet overbought. However, slowing momentum on the weekly chart suggests buyers are still taking profit on rallies. For now, BTC is approaching the next level of resistance around $60,000 which has triggered short-term overbought conditions over the past few months. Original story found here: Bitcoin Holds Support, Faces Resistance Around $60K
A message from CME Announcing CME Micro Bitcoin Futures (MBT) : Ready for Trading Tap into the precision of a smaller-sized Bitcoin contract At 1/10 the size of one bitcoin, MBT futures provide an efficient, cost-effective way to fine-tune bitcoin exposure and to enhance your trading strategies. Enjoy the features of Bitcoin futures, but in a smaller size that gives active traders more choices for managing bitcoin price risk.
BOLO Be on the look out for these upcoming events: 18:20 (2:20 p.m. ET): Federal Reserve Chair Jerome H. Powell speech on community development at the National Community Reinvestment Coalition’s 2021 Just Economy Conference (watch live via livestream)
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: Why Wall Street Veterans Are Moving to Crypto; Markets Check, a Live Performance NFT As the crypto industry grows, it is attracting more Wall Street veterans, but can it compete with traditional finance that is also adding crypto services? Bill Powers, a former PIMCO executive now at Arca, joins "First Mover" to discuss business and markets news and share his journey. Also, decentralized lending protocol C.R.E.A.M Finance Co-founder Leo Cheng explains a new initiative to strengthen DeFi security. Plus, techno DJ UMEK on the NFT auction underway for one of his live performances.
Introducing CoinDesk Indexes TradeBlock, the leader in providing crypto asset indexes to financial institutions, will now assume the CoinDesk name. Introducing CoinDesk Indexes: the industry standard for institutional-grade digital currency price references with billions of dollars in monthly trading volume quoted against them. Underlying new brand names, TradeBlock's index methodology will continue to adhere to the standards of integrity and reliability that have always differentiated its indexes. Read more about CoinDesk Indexes, the industry standard in crypto benchmarks.
Latest Headlines Crypto Long & Short: Bitcoin’s Potential as a Collateral Class Signs point to a new avenue of growth for crypto-backed lending. Former CFTC Boss’s Digital Dollar Project Is Ready to Kick Off First US CBDC Pilot Projects The Digital Dollar Project's first five pilots will launch over the next year.
CoinDesk Research: Does Bitcoin Have an Energy Problem? Is Bitcoin bad for the environment? This CoinDesk Research report looks at the data behind the most common critiques and shows that, while Bitcoin uses a lot of energy, the mix is evolving toward renewables. Bitcoin also incentivizes investment in clean energy sources, can convert pollution into value, and redistributes wasted power production.
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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