Bitcoin Eyes U.S. Data Deluge, Charts Signal Seller Fatigue

The latest moves in crypto markets, in context

February 25, 2022

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

Market Moves: Bitcoin recovers as the West's sanctions on Russia were softer than feared.
Featured stories: Bitcoin's technical charts signal seller fatigue.

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:

Chris Giancarlo, senior counsel, Willkie Farr & Gallagher, and former chair of the U.S. Commodity Futures Trading Commission
Yaya Jata Fanusie, chief strategist, Cryptocurrency AML Strategies LLC

Today's newsletter was edited by Omkar Godbole and produced by Bradley Keoun.

Market Moves

By Omkar Godbole

Bitcoin held on to recovery from one-month lows early today while European and Asian stocks gained ground and the safe-haven dollar dropped as the West's sanctions on Russia were softer than feared.

Alternative cryptocurrencies led the broader crypto market recovery, having taken a bigger hit on Thursday. Layer 1 coins like LUNA, FTM, DOT were notable gainers along with GNT, the native coin of decentralized peer-to-peer network Golem, which boasted a 60% gain on a 24-hour basis.

The crypto market risk reset looked to continue, going by how options traders priced expectations for bitcoin's price turbulence over different time frames and positive news flow from the war front.

"President Xi Jinping has just spoken with his Russian counterpart on the phone. President Vladimir Putin said that Russia is willing to have high-level dialogue with Ukraine," Hua Chunying, China's spokesperson, tweeted.

During North American hours, the focus will be on Wall Street and the U.S. economic data, which could sway expectations of how aggressive the Federal Reserve would be in scaling back stimulus.

According to investing.com, data due at 13:30 UTC is expected to show that U.S. personal spending rose 1.6% from the prior month, beating December's print of -0.6%. Durable good orders for January, also due at 13:30 UTC, are expected to rise by 0.8%, after falling 0.7% the previous month. Lastly, the core PCE price index, the Fed's preferred measure of inflation, is forecast to rise to 5.1% on the year in January.

A big beat on expectations may cement the case for a 50 basis point interest rate hike next month, bringing renewed selling pressure to bitcoin and other risk assets. Several Fed officials have recently expressed support for a 50 basis point move in March. On Thursday, markets priced out prospects of such a move after Russia invaded Ukraine.

Also read: Crypto Market Capitalization Slumps to $1.5T as Russia Attacks Ukraine

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Crypto Prices

Bitcoin (BTC)

See the latest price here

Ether (ETH)

See the latest price here

The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours:

Biggest Gainers:

Asset	Ticker	Returns	Sector
Chainlink	LINK	+19.1%	Computing
Polygon	MATIC	+16.5%	Smart Contract Platform
Cosmos	ATOM	+15.2%	Smart Contract Platform

Biggest Losers:

There are no losers in CoinDesk 20 today.

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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Latest Headlines

Charts Signal Seller Fatigue

By Omkar Godbole

Bitcoin's daily chart. (Chart by TradingView)

Bitcoin formed a long-legged daily candle on Thursday with a swift recovery from one-month lows under $33,500. The candle engulfed the preceding day's losses.

Long-legged candles indicate that sellers initially controlled the market only to be overpowered by buyers ahead of the UTC close. Thus, long-legged candles imply bear fatigue, mainly when they occur at multi-month lows or after a prolonged sell-off, as is the case with bitcoin.

That said, a strong follow-through remains elusive. "On Bitcoin, yesterday saw a combined Key Reversal Up & Bullish Engulfing Pattern. However, there has been no follow-through higher today," Eddie Tofpik, head of technical analysis and senior markets analyst at London-based ADM Investor Services International Ltd, said in a LinkedIn chat.

Chart-based traders usually want to see a strong follow-through after long-legged candles before calling a bullish trend change. So, Friday's UTC close is pivotal. A close above Thursday's high of $39,720 would confirm the reversal higher.

The OGs of NFTs get animated with the biggest stars from around the world in this entertaining new series from CoinDesk TV. Tune in Tuesdays in February at 4 p.m. ET.

ICYMI

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

Global Markets Roiled as Russia Invades Ukraine, Crypto Market Cap Falls to $1.5T

CoinDesk Russia-based investigative reporter Anna Baydakova joins "First Mover" with the latest from the ground as Russia launches attack in Ukraine. Michele Schneider of Marketgauge Group shares her analysis as crypto market cap plummets to $1.5 trillion. Plus, Tax Week coverage continues with tips from Dan Hannum, Chief Operating Officer at ZenLedger.

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.