Bitcoin and Europe's Gasflation

The latest moves in crypto markets, in context

Edited by Omkar Godbole

October 7, 2021

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Bitcoin (BTC)

+5.3% $54,160

Ether (ETH)

+5.3% $3,580

(Price data as of October 7 @ 11:15 UTC)

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Good morning, and welcome to First Mover. Here's what's happening this morning:

Market Moves: Europe's gasflation, a blessing for bitcoin

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. Today's show will feature guests:

Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation

Alex Holmes, Chairman and CEO of MoneyGram International

Robert Rico, Head of Open Banking at API3

Don Roberts, CEO of Small Exchange.

– Omkar Godbole

Biggest Movers

These are the biggest movers in the CoinDesk 20 over the past 24 hours:

Gainers:

Polkadot (DOT): +12.8%

Losers:

Dogecoin (DOGE): -1.6%

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.

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Market Moves

by Omkar Godbole

Crypto markets are a sea of green, with dogecoin rival Shiba Inu leading the way higher with 44% gains. The cryptocurrency has chalked up 300% gains since Oct. 4. As a result, its market capitalization has increased to $13.2 billion - the 14th largest in the crypto market, per data source Messari.

According to blockchain analytics firm Santiment, SHIB's blockchain data shows extremely high active deposits, and the rally could lose some steam.

In traditional markets, the Dow futures are trading 235 points higher, courtesy of easing concerns of a potential U.S. debt default. The U.S. 10-year yield is steady above 1.5%. Renewed bullish momentum in equity markets could add to bolster bullish pressures around bitcoin.

Europe's Gasflation, a Blessing for Bitcoin?

Bitcoin's bullish case continues to strengthen as inflation expectations in Europe, the world's largest cryptocurrency market, are surging, thanks to record gas and electricity prices.

The U.K.'s 10-year breakeven rate, a market-based measure of expected price pressures over the next decade, rose to 4% on Wednesday – twice the target of Bank of England's annual goal of 2%.

As of Wednesday, the European natural gas prices were trading at EUR 150 megawatt per hour, up 50% in two days and 630% since the start of this year versus bitcoin's 87% gain, as noted by Bloomberg's Helen Robertson.

Bitcoin is widely considered as inflation hedge like gold as a programmed code called mining reward halving reduces the pace of bitcoin's supply expansion by 50% every four years. Analysts told CoinDesk earlier this week that investors are buying the cryptocurrency as an inflation hedge amid the inflation scare.

The cryptocurrency has moved in tandem with the U.S. inflation expectations in the past, as seen in the chart below.

Chart showing tight correlation between bitcoin and U.S. 10-year breakeven rate (Source: Federal Reserve Bank of St. Louis)

States-side investors are also beginning to price in inflation scare. The 10-year U.S. breakeven rate rose to 2.45% on Tuesday, hitting the highest level since June.

Bitcoin's technical charts have flipped bullish after Wednesday's 7% gain, which breached the downtrend line connecting the April high of $64,801 and September highs near $52,000.

Bitcoin's daily chart (Source: TradingView)

The breakout is backed by a pickup in volumes and accumulation by so-called whales.

Read the original story here:

Bitcoin’s Technical Bias Flips Bullish as Price Climbs Above Descending Trendline

Technician's Take

by Damanick Dantes, CMT

Bull Grip Tightens on Bitcoin

Bitcoin's (BTC) intermediate-term uptrend has improved over the past few months, which could keep buyers active toward the all-time high near $64,000.

Bitcoin's daily chart with RSI (Source: TradingView, CoinDesk)

The relative strength index (RSI) is the most overbought since September, which preceded a correction. However, a similar downturn is unlikely given strong upside momentum and a series of breakouts on the charts.

Pullbacks could be limited given strong upside momentum.

Read the original story here:

Bitcoin Rally Holds Support Above $52K; Next Resistance Near All-Time High

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BOLO

Be on the lookout for the following events today:

ICYMI

In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:

What’s Behind the Rally as Bitcoin Challenging $52K Level? SEC Chair Gary Gensler Tells Congress SEC Has No Plans to Ban Crypto

"First Mover" hosts dig into today's top stories: Bitcoin surging near $52K as SEC Chair Gary Gensler reiterates his agency has no plans to ban crypto, CoinDesk kicks off 2021 Bitcoin for Advisors Conference, and Origin Wealth Advisors Financial Planner Morgen Rochard gives her insights into the event and why financial advisors are advising clients to add crypto to their portfolios. Plus, Impact Theory Co-founder & CEO Tom Bilyeu explains the company's latest NFT collection as NFT becomes a mainstream gateway to crypto.

A Message from CoinDesk

While the pandemic has stunted some industries, fintech development and adoption have accelerated. Join executives from across the financial and technology sectors at Accelerate Finance: Money in a Mobile World on Oct. 13 to understand what's next in tech and how consumer expectations are driving change. Register now.

Latest Headlines

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Gensler’s Crypto Testimony: 6 Key Takeaways
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FSB Says Adoption of Global Stablecoin Regulations Shows ‘Gaps’ and ‘Fragmentation’

The international body said its last year’s recommendations on global stablecoin regulation were still at an “early stage.”

What the ‘Pandora Papers’ Mean for Bitcoin

Coinbase Likely to Top Q3 Trading, Revenue Estimates on Bitcoin Volatility: Oppenheimer

There is an 18% potential upside to trading volume and an 11% upside to total revenue estimates, an analyst wrote Tuesday night.

Swiss FlowBank to Open Crypto ‘Gateways’ Following $11.8M Investment from CoinShares

The Nasdaq-listed digital asset manager said it was offering its expertise for the bank to start building atop its technology stack.

Bitcoin Futures Premium on CME Surges, Hinting At Institutional Demand

A futures-based ETF, if approved, could bring more buying pressure for the CME futures.

Crypto Miners Hoarding Bitcoins as Price Surges Above $55K

Riot Blockchain, Marathon Digital and Hut 8 have all been “hodling” the bitcoin they’ve mined in September.

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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