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| The latest moves in crypto markets, in context By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets September 20, 2021 Sponsored by Bitcoin (BTC) -7.4% $44,564 Ether (ETH) -8.5% $3,121 (Price data as of September 20 @ 11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Bitcoin Slips Below $45K as S&P 500 Futures Drop, Stablecoin Regulation Fears Resurface Technician's Take: Bitcoin in Pullback Mode; Support at $40K-$42K
And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and me at 9:00 a.m. U.S. Eastern time. Today's show will feature guests: Paul Brody, Ernst & Young Abraham Sutherland, Saker Group Matthew Sigel, VanEck– Lawrence Lewitinn
Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: None of the assets in the CoinDesk 20 is up in the past 24 hours.
EOS (EOS): -13.7% Polkadot (DOT): -12.1%Chainlink (LINK): -11.8% The Graph (GRT): -11.7% XRP (XRP): -11.5%Aave (AAVE): -11.0%
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.
A message from ByBit We’re Giving Out 5 Million BIT!
Market Moves by Omkar Godbole Bitcoin Slips Below $45K as S&P 500 Futures Drop, Stablecoin Regulation Fears Resurface Bitcoin fell as concern over China and caution ahead of this week’s Federal Reserve meeting weighed on U.S. stock index futures. Speculation that the U.S. government may declare stablecoins as a risk to the financial system could be adding to uncertainty in the crypto market.
The top cryptocurrency by market value is currently priced at $44,800, down 5% on the day. The broader market is a sea of red with ether, cardano, and solana nursing losses of as much as 7%, CoinDesk 20 data show.
Futures tied to the S&P 500, Wall Street’s main equity index and the global benchmark for risk assets, are trading 1% lower alongside similarly sized losses in European stock indexes and shares in Hong Kong and Japan.
“Investors look to be taking risk off the table on fears that [a] crisis at China Evergrande Group may become a systemic problem to global markets,” Pankaj Balani, CEO of Delta Exchange, said. “Markets will also be looking at the Fed commentary later this week to make sure that there are no changes in liquidity from the central bank.”
Evergrande fell more than 10% in Hong Kong early today, taking the year-to-date drop to 85% on concerns the cash-strapped property giant might default on $83.5 million in interest payments due this Thursday. Chinese authorities have already told major lenders that the company is likely to miss payments. While some observers have called the Evergrande crisis China’s “Lehman moment,” Messari’s Mira Christanto says such fears are overblown.
The two-day Fed meeting, which concludes on Wednesday, will be keenly watched by investors for clarity on the central bank’s plans to scale back, or taper, the liquidity-boosting stimulus program.
Communications from the Fed members have been hawkish in recent weeks, with many calling for a beginning of the taper before the year-end. Bitcoin and other asset prices, in general, could face selling pressure if this week’s meeting confirms that tapering will begin in October or November.
The greenback is rising ahead of the Fed meeting, reflecting a flight to safety and speculation the central bank would signal October or November taper. The dollar index, which tracks the currency’s value against major fiat currencies, has jumped to a one-month high of 93.34, extending a two-day winning streak, according to TradingView.
Aside from macro factors, impending regulatory action on stablecoins – the dollar-pegged cryptocurrencies that promise stability and act as a gateway to crypto markets – could be adding to selling pressure around bitcoin.
An article published by The New York Times on Sunday said U.S. regulators are concerned that stablecoins may become a source of volatility and may bring the dollar-pegged currencies under regulatory purview by declaring them as a risk to the financial system, or treat them as securities, money market mutual funds or as banks. While Washington’s discomfort with stablecoins is not new, the fact that mainstream media outlets ran a cover story suggests regulation is coming soon.
A recent Bloomberg report said officials are considering launching a formal review by the Financial Stability Oversight Council into whether stablecoins pose an economic threat, a process that could bring more severe oversight on the rapidly expanding industry. The total market capitalization of all stablecoins, including tether, has seen a near 10-fold rise to $115 billion over the past 12 months. A regulatory crackdown may bring short-term pain to crypto markets.
These issues, coupled with the quarterly bitcoin options expiry due this Friday, may keep the cryptocurrrency volatile this week. Balani said, however, the underlying trend will remain bullish while bitcoin holds above $40,000.
Past data shows September dips pave the way for larger bull runs, particularly those seen after a halving year. Bitcoin underwent its third mining-reward halving in May last year. The first and the second halvings took place in 2012 and 2016. Bitcoin since 2012. (Source: TradingView) Bitcoin dipped 1.37% in September 2013 only to rally from $100 to $1,100 in the following two months. It staged a similar rally after the September 2017 dip of 8%. Read the original story here: Bitcoin Slips Below $45K as S&P 500 Futures Drop, Stablecoin Regulation Fears Resurface
Technician's Take by Damanick Dantes, CMT Bitcoin in Pullback Mode; Support at $40K-$42K Bitcoin (BTC) sellers were active over the weekend as the cryptocurrency’s price dipped below the 200-day moving average at $45,000. Initial support is seen between the $40,000-$42,000 range where a breakout occurred on August 6.
The $50,000 resistance level was tested several times over the past few weeks, although buyers ultimately took profits as overbought signals appeared on the charts. BTC was trading around $44,200 at press time and is down 5% over the past 24 hours. Bitcoin daily price chart. (TradingView, CoinDesk) The relative strength index (RSI) on the daily chart dipped below the 50 neutral level and is not yet oversold. This suggests a period of consolidation could persist between $40,000 support and $50,000 resistance.On the four-hour chart, the RSI is the most oversold since September 8, which preceded a brief price bounce after a 19% sell-off. Short-term buying could occur, although upside appears to be limited beyond $50,000 given strong overhead resistance. Read the original story here: Bitcoin in Pullback Mode; Support at $40K-$42K
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BOLO Be on the lookout for the following events today: Mainnet is an immersive, agenda-setting annual summit hosted in-person and virtually by Messari. The summit gathers crypto leaders, operators, builders, and investors for three days of future-focused collaboration, networking, and programming. Speakers list EU Blockchain Week 2021: Blockchain & AI for European Green Deal (Sept. 20 - 24)
ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:
"First Mover" host Christine Lee speaks to FTX Chief Executive Officer Sam Bankman-Fried on the firm's expansion plan and innovation in the crypto and blockchain space. BTCS Chief Executive Officer Charles Allen provides in-depth analysis on the crypto markets and the impact of $1 billion worth of ETH being burned. CoinDesk Managing Editor for Global Policy & Regulation Nikhilesh De shares insights into the news that the U.S. Treasury Department is preparing a report on stablecoins. Plus, Anchorage CEO Nathan McCauley on how crypto companies should prepare for more regulations.
A Message from CoinDesk Financial advisors are taking a cautious approach to bitcoin as client interest in the space increases and new products offer retail investors easier access to this new asset class. As trusted guides, advisors cannot risk falling behind, even if the jury is still out on bitcoin's role in a client's portfolio. At Bitcoin for Advisors 2021on Oct. 6, Michael Kitces and Tyrone Ross share insights from the front lines. Apply today.
Latest Headlines How the Prediction Markets Are Wagering on Canada’s Election The odds favor a Trudeau reelection but not a Liberal majority, according to prices on blockchain-based Polymarket and centralized platform PredictIt. Stablecoin Feature in New York Times Signals Regulation Is Coming Designating them as “systemically risky” and thus eligible for oversight is one option available, the article said.Bankman-Fried Says Stricter Regulation of Crypto Exchanges Would Be Positive FTX CEO said a ban on stablecoins would be “sad.”
Cross-Chain Protocol pNetwork Loses $12M to Hack The attack targeted a link to Binance Smart Chain through a bug in the code.
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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