Bitcoin's Awaits Triangle Breakout, Focus on Dollar

The latest moves in crypto markets, in context

March 10, 2022

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

Market Moves: Bitcoin drops as Ukraine-Russia talks break down.
Featured stories: Bitcoin awaits triangle breakout. Traders need to keep a close eye on dollar's monthly chart.

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 Matta, president, 3iQ Digital Assets
Patrick Sells, chief innovation officer, NYDIG
Tom Novak, chief digital officer, Visions Federal Credit Union

Today's newsletter was edited by Omkar Godbole and produced by Parikshit Mishra.

Market Moves

By Omkar Godbole

Bitcoin fell to $39,000 during the overnight trade as global market euphoria cooled after negotiations between Ukraine and Russia broke down in merely two hours, signaling a long road ahead to peace.

Late Wednesday, the U.S. House passed legislation banning imports of Russian oil and other energy products in a bid to impose stricter punitive sanctions on Moscow for invading Ukraine. Oil and other commodities have been on a tear ever since the conflict started and threaten to send a new wave of inflation worldwide.

The top cryptocurrency's options market saw bullish flows, with buying an outright call options and purchasing call spreads being the most popular trades. A call buyer is implicitly bullish on the market.

Bitcoin: global request for quotes (RFQ) trades (Source: Griffin Ardern)

"At present, the short-term bullish sentiment appears relatively strong," Griffin Ardern, a volatility trader from crypto-asset management company Blofin, said while commenting on flows.

"Ahead of the quarterly delivery, the only uncertainty is from the European Central Bank. Other things like Fed rate hikes are effectively already priced in," Ardern added.

Most alternative cryptocurrencies followed bitcoin lower, with privacy coins taking a bigger hit than coins associated with smart contract blockchains, decentralized finance protocols and gaming tokens.

THORChain's RUNE token surged 37%, topping $5.50 after the cross-chain protocol listed synthetic assets on its platform. Synthetic assets are tokenized derivatives representing traditional assets like stocks or bonds

The dollar index (DXY), which tracks the greenback's value against majors, traded steady above 98.00, having tanked 1% on Wednesday.

Traders eyed the U.S. consumer price index data due at 13:30 GMT, which is expected to show the cost of living rose at an annualized 7.8% in February following January's 7.5% increase.

The European Central Bank (ECB) left key policy tools unchanged, as expected. ECB's President Christine Lagarde will hold a news conference at 13:30 UTC.

Read:

Inflation, Tracked by Bitcoiners, Keeps Accelerating, and It Hasn't Even Peaked

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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:

There are no gainers in CoinDesk 20 today.

Biggest Losers:

Asset	Ticker	Returns	Sector
Internet Computer	ICP	−7.5%	Computing
Bitcoin	BTC	−7.3%	Currency
Cosmos	ATOM	−7.2%	Smart Contract Platform

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

Bitcoin's Triangular Consolidation

By Omkar Godbole

While bitcoin reversed Wednesday's spike, it remained trapped in a triangle pattern marked by Jan. 24 and Feb. 24 lows and Feb. 10 and March 2 highs.

"The news has gotten better for bitcoin lately, but technically speaking, there is not much to say until we see a breakout from these triangles," Jurrien Timmer, director of global macro at Fidelity, tweeted.

A potential decline below the lower line of the trendline would imply a continuation of the broader drop from record highs. On the downside, support is seen at $30,000, below which the next technical price floor is seen directly at the December 2017 high of $19,891.

A rise above the upper trendline, if any, may see chart analysts call a bullish revival.

Bitcoin's daily chart (Source: TradingView)

Whether bitcoin will break higher or lower from the triangle is anybody's guess. That said, the impending U.S. inflation figures might inject volatility into the market. A big beat on expectations may bring selling pressure to bitcoin, as discussed here.

"In my opinion, investors have not fully priced in the possibility of an early shrink of the [Fed] balance sheet (say, starting in April)," Blofin's Ardern said. "That could happen if the CPI data beat expectations by a wide margin. It also depends on what the Fed chair Powell will say next week."

Focus on DXY's triangle

The DXY's monthly chart shows the greenback has formed a triangle pattern identified by connecting January 2017 and March 2020 highs and February 2018 and January 2021 lows.

A potential triangle breakout might pave the way for a notable bull run. A dollar rally is usually considered bearish for bitcoin, gold and other assets priced in the greenback.

Dollar index's monthly chart showing a triangle pattern (Source: TradingView)

ICYMI

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

Bitcoin Soars Above $41K as US President Joe Biden Signs Executive Order on Cryptocurrency

Blockchain Association Executive Director Kristin Smith and CoinDesk Managing Editor for Global Policy and Regulation Nikhilesh De join "First Mover" to share their insights and analysis of President Biden's executive order that calls for federal agencies to coordinate their approach to cryptocurrencies. Prices of bitcoin, ethereum and other digital assets jumped on the heels of this news. John Sarson, Sarson Funds CEO and founder, shares his markets analysis. Plus, tips on how to navigate crypto tax rules this tax season from Seth Wilks of Taxbit.

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.