Retail Wakes Up to Bitcoin Rally

The latest moves in crypto markets, in context

Edited by Omkar Godbole

October 12, 2021

Sponsored by

Bitcoin (BTC)

+1% $57,000

Ether (ETH)

-4% $3,442

(Price data as of October 12 @ 11:00 UTC)

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

Market Moves: Bitcoin Market No Longer In a State of Disbelief

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:

Mannik Dhillon, President at VictoryShares and Solutions

Simone Maini, CEO at Elliptic

Justin Ehrenhofer, Community Member of Monero

– Omkar Godbole

Biggest Movers

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

Gainers:

Losers:

Chanlink (LINK): -9.7%

Polkadot (DOT): -9.3%

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

Bitcoin's near-vertical rise continues at the expense of ether and other alternative cryptocurrencies. While the cryptocurrency is currently priced at five-month highs above $57,000, its dominance rate or the share in the total crypto market has jumped to a two-month high of 46.5%.

"Bitcoin's strength is due to the expectation that the SEC will approve the Proshares Bitcoin Strategy ETF on Oct. 18," Jeff Dorman, chief investment officer at Arca Funds, mentioned in the market update published Monday.

While improved prospects of a futures-based exchange-traded fund (ETF) have brought cheer to the market, the product has a downside. They call it contango bleed in the market: a futures-based ETF often underperforms the underlying asset due to longer-dated futures contracts trading at higher prices than shorter-dated contracts. Read the detailed piece here.

In traditional markets, fears of price pressures lurching out of control continue to weigh over the risk sentiment and push bond yields higher. Bloomberg data shows stagflation – a combination of slow economic growth and relatively high inflation – is a major talking point in the market right now.

Chart showing news trend on Stagflation (Source: Bloomberg)

Market-based measures of inflation expectations are also rising across the globe in the wake of the energy crisis. All this favors perceived inflation hedges like gold and bitcoin.

"When you combine the centralized failures [U.S. debt ceiling saga] with regulatory uncertainty, a weakening tech sector, and renewed inflation fears, it became a perfect storm for Bitcoin," Dorman said.

Market no longer in a state of disbelief

Data tracked by blockchain analytics firm Sentiment shows bitcoin-related social media chatter has recovered sharply from three-month lows seen last week. It shows the market is no longer in a state of disbelief for the cryptocurrency's price rally.

Bull runs typically lose steam with a surge in retail investor interest. So, a continued spike in the social media chatter could be taken as a sign of bitcoin nearing an interim price top.

"Bitcoin's social data now seems to point to growing retail greed, so some caution is advised as BTC eyes the $60,000 resistance," Santiment said in its weekly report. "While not a nail in the coffin, the bullish consensus towards Bitcoin may prompt a short-term price normalization in order for the market to flush out all this newfound joy from the everyday trader."

No Signs of Overheating in Derivatives Market

Chart showing bitcoin's funding rates (Source: bybt)

Bitcoin's funding rates or costs associated with holding long positions in the perpetual futures remain flat to negative on major exchanges compared to elevated levels seen just ahead of the price slide in May and early September.

The data shows the derivative market is far from being overheated, and the probability of the cryptocurrency suffering a leverage-driven price pullback is low.

Read the original story here:

Bitcoin Eyes $60K as Active Entities Surge

Technician's Take

by Omkar Godbole

Bitcoin's Impending Bull Cross

Bitcoin's impending bull cross of the 100- and 200-day MAs is widely taken to represent a long-term bull market and may invite stronger chart-driven buying pressure.

Bitcoin's daily chart showing an impending bull cross (Source: TradingView)

A 10-month bull run from $8,300 to $64,801 followed the previous bullish signal confirmed in June 2020. The cryptocurrency nearly doubled to $13,880 after the bull cross of 100- and 200-day MAs in early May 2019.

The immediate bias would remain bullish while prices are holding above the former hurdle-turned-support at $53,000.

Read the original story here:

Bitcoin's Price Chart Shows Impending Bull Cross

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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:

Bitcoin Blasts Through $56K as Bull Run Continues. SEC Approves Volt Equity’s Crypto Stock ETF

"First Mover" team digs into the news that SEC has just approved Volt Equity’s crypto stock ETF which will be listed on New York Stock Exchange under the ticker BTCR; Volt Equity CEO Tad Park shares the details of this launch. Bitcoin charging ahead, passing $56K as the bull run continues; CrossTower Co-Founder and CEO Kapil Rathi provides his analysis on the price movements, plus, Blockstream CIO Samson Mow shares his insights on stablecoins and tether as they come under scrutiny.

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

Dying for a Bitcoin Futures ETF? Watch Out for ‘Contango Bleed’

There’s a downside to SEC Chair Gary Gensler’s preference for an exchange-traded fund focused on bitcoin futures. But it’s unlikely to deter investors

Coinbase Co-Founder’s Venture Firm Raising $1.5B Fund, Document Shows

An investor deck shows Paradigm is in the process of raising what would be one of the VC world’s largest crypto-focused funds.

Sign-In With Ethereum Is Coming

The dangers of letting Facebook control your online identity are clear. One alternative would use your Ethereum wallet instead, and let you control your own data.

Gene Simmons’ $300K Cardano Investment Has More Than Doubled Since February

The Kiss star has veered heavily into crypto in recent years. It may have paid off handsomely.

Soccer NFT Platform Sorare Is Being Investigated by UK Gambling Regulator

The United Kingdom Gambling Commission wrote that Sorare may have to register as a licensed gambling operator.

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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