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. Here’s what’s happening this morning: Market Moves: Bitcoin's recovery stalls. A trader says the cryptocurrency could gravitate toward the so-called max pain point ahead of monthly options expiry. Chartist's Corner: Dogecoin eyes breakout. 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. Henri Arslanian, global crypto leader, PwC Ming Wu, founder and CEO, Strips FinanceDave Abner, global head of business development, Gemini Today’s newsletter was edited by Omkar Godbole and produced by Parikshit Mishra. Let us know what you think by replying to this email. |
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Bitcoin took a breather early Tuesday, marking a weak follow-through to Monday's impressive recovery from the six-week low of $38,210 to $40,600. The momentum stalled even as U.S.-based financial services firm Fidelity Investments said it would allow investors to put bitcoin (BTC) in their 401(k) retirement savings accounts later this year. Observers cheered the news, saying the passive bid from 401(k)s would be massive and accelerate mainstream adoption. More than 20,000 companies reportedly use Fidelity to administer retirement accounts. "Fidelity are the first major retirement-plan provider to do this, and I think it sends a significant message to pension providers – nobody wants to be first, but nobody wants to be last," Marcus Sotiriou, analyst at the U.K.-based digital asset broker GlobalBlock, said in an email. In another development, the Bitcoin Mining Council's quarterly report published Monday said mining efficiency rose by 63% year-on-year in the first three months, with sustainable energy usage at 58%. The network used 25% less energy even as the hash rate or the computing power dedicated to the blockchain rose. "These improvements are appealing for institutions who see the environmental impact as one of the biggest reasons not to invest in bitcoin," Sotiriou said. Perhaps renewed weakness in stock markets and caution ahead of next week's Federal Reserve meeting kept buyers at bay. Futures tied to the S&P 500 pointed to a negative open with a 0.4% drop, and European stocks struggled to stabilize after Monday's slide. "The recovery attempt of risk appetites, reflected in the recovery and strong close in U.S. stocks yesterday, was dealt a blow by Russia's Foreign Minister's warning of a serious danger of nuclear conflict," Marc Chandler, chief market strategist at Bannockburn Global Forex, said in an email. Griffin Ardern, a volatility trader from crypto asset management firm Blofin, said, "It's going to be difficult for the crypto market to make new highs. The Fed's May meeting is imminent, and bearish sentiment still dominates the market." Markets expect the Fed to lift the benchmark interest rate by 50 basis points (0.5 percentage point) to a range between 0.75% and 1% at next week's meeting. The central bank kicked off the tightening cycle last month with a 25 basis point rate hike. Ardern added that bitcoin and ether prices might be biased toward max pain levels ahead of Friday's monthly options expiry. According to data tracked by Skew, bitcoin options worth $2.2 billion and ether options worth $1.2 billion are set to expire this Friday. The max pain for bitcoin and ether is $41,000 and $3,000, respectively. |
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Bitcoin's max pain point for April expiry, according to data from dominant crypto options exchange Deribit |
The max pain is the price level at which option buyers would suffer the most loss on expiry. The theory is that the max pain acts as a magnet while heading into the expiry as option sellers, typically large institutions, buy or sell the underlying asset to keep the price around key levels to inflict maximum loss on buyers. The phenomenon is quite popular in the currency markets. While skeptics may say the crypto options market is still relatively small to impact the spot price, bitcoin has in the past gravitated toward the max pain point ahead of monthly and quarterly expiries. |
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. |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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Top Gainers Top Losers There are no losers in CoinDesk 20 today. |
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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 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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Dogecoin Eyes Breakout By Omkar Godbole |
Dogecoin, the meme-focused cryptocurrency, is looking to break out from a large descending contracting triangular pattern.
A breakout, if confirmed, may bring a sharp rally. |
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Dogecoin's log-scaled daily price chart. (CoinDesk, TradingView) |
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. |
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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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