The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. |
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Good morning, and welcome to First Mover. I'm Bradley Keoun, here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off today for a national holiday in the U.K.) In today's newsletter: - Price Point: Bitcoin slid to a three-month low under $19K, as traders prep for this week's Fed meeting. The Ethereum Merge hype has definitely faded.
- Market Moves: The Wall Street firm Goldman Sachs is keeping a close on rising inflation-linked bond yields, and Omkar Godbole writes that the trend could be worrying for bitcoin.
- Chart of the Day: Crypto analysts see bearish indicators in price charts, and they're mapping out how low bitcoin might trade.
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Bitcoin slid to a three-month low, leading a broad decline in digital-asset markets, as traders looked ahead to a likely stiff interest-rate hike at this week's Federal Reserve meeting. The two-day confab of top U.S. monetary policy makers concludes Wednesday. While many crypto investors and analysts have argued that bitcoin is a hedge against inflation, the major force driving the largest cryptocurrency's price down lately is hawkish central bank actions to slow the pace of consumer-price rises. "The macroeconomic environment still has a tight grip on the direction of financial assets, including bitcoin," analysts for the bitcoin-focused investment firm Nydig wrote Friday. As of press time, bitcoin (BTC) was changing hands around $18,700, down 3.8% on the day. Ether (ETH) was trading just above $1,300, well off last month's $2,000 price high despite last week's Merge on the Ethereum blockchain – its landmark transition to a more energy-efficient "proof-of-stake" system – going as smoothly as possible. "The sell-the-news reaction was strong," Paul McCaffery, an analyst for the brokerage firm KBW, wrote in a report. The CoinDesk Market Index was down 2.4% over the past 24 hours. CoinDesk's Omkar Godbole reported that crypto traders are putting on fresh bearish bets. |
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Goldman's Bullish Stance on 'Real Bond Yield' Spells Bad News For Crypto |
The U.S. inflation-indexed bond yield has surged by 100 basis points (one percentage point) since early August, causing renewed jitters in risk assets, including cryptocurrencies. And to the dismay of bitcoin (BTC) bulls, the so-called real yield is likely to rise even further in the coming months. On Friday, the investment-banking giant Goldman Sachs (GS) said that yields on 10-year U.S. Treasury inflation-protected securities (TIPS), which are adjusted periodically to compensate for increases in the consumer price index, could rise to 1.25% by the year-end and eventually peak somewhere between 1.25% and 1.5%. The real yield stood at 1.02% at press time, the highest since November 2018, according to data from charting platform TradingView. Bitcoin has historically moved in the opposite direction to the real yield. The 90-day correlation coefficient between the two reached a record of minus 0.95 at the end of June. (A reading of minus 1 is considered a perfectly inverse relationship.) Read the full story here. |
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Bitcoin daily price chart reveals reversal at bearish trend line (dotted line). (TradingView/CoinDesk) |
Bitcoin's reversal lower from confluence of the bearish trendline and key long-term moving averages suggests a resumption of the broader downtrend. - "The bear market was confirmed by BTCUSD actively selling off after testing the 50-day moving average, The FXPro Analyst Team wrote in Monday's edition of the daily market update.
- "If we break $17,400 decisively, $14,800 is the next support level," Coinbase Institutional's Brian Cubellis noted in the weekly markets update published Friday.
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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 Market Index is a broad-market index of digital assets, weighted by market capitalization. A full description of the methodology is here. |
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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. - Kristin Smith, executive director, Blockchain Association
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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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