The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk news reporter Was this newsletter forwarded to you? Sign up here. |
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Welcome to a new week! Here's what you need to know today in crypto: |
- Bitcoin briefly rose above $63,000, then fell back.
- A BTC drop below $60,000 could trigger a panic sell-off, according to one trader.
- Metaplanet follows the MicroStrategy playbook adopting bitcoin as a reserve asset.
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CoinDesk 20 Index: 2,152 +1.0%
Bitcoin (BTC): $62,576 +2.3%
Ether (ETC): $2,959 +1.0%
S&P 500: 5,222.68 +0.2%
Gold: $2,346 −0.9%
Nikkei 225: $2,346 −0.9% |
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Bitcoin (BTC) rose during the European morning on Monday, peaking at around $63,200, before retreating below $62,800. BTC may be again trying to rally above $64,000, of which there have been numerous instances this month, all of which have been sold off. This behavior, along with transaction numbers plummeting, points toward a consolidation in the market and the possibility of bitcoin being range-bound for the time being. At the time of writing, bitcoin is 2.34% higher in the last 24 hours at $62,543. The CoinDesk 20 Index (CD20), which measures the broader digital market, has added 1.1%, with the likes of ETH and SOL showing more modest gains, trading just below $3,000 and $150 respectively. |
Bitcoin's price action since it attained new all-time highs in March has been characterized by lower lows and lower highs as a shift toward selling has taken hold in the market thanks to long- and short-term holders alike being in profit. "A failure below $60K could trigger something of a panic sell-off," FxPro trader Alex Kuptsikevich told CoinDesk in a note. "The positive scenario, in our opinion, will become the main one with a rise above $65K, fixing the price at the 50-day moving average and the reversal area in early May." He added that downward pressure is likely related to asset sell-offs by miners and concerns over tighter regulation of cryptocurrencies. Japanese investment and consulting firm Metaplanet has adopted bitcoin as a reserve asset to hedge against the country's debt burden and yen volatility. Metaplanet has acquired 117.7 BTC ($7.35 million) since April, imitating the strategy of MicroStrategy in the U.S. The ratio between Japan's gross debt and GDP currently exceeds 254%, the highest in the advanced world, according to data tracked by the IMF. For comparison, the U.S. debt-to-GDP ratio has exceeded 123%. The yen has depreciated by 50% against the U.S. dollar since early 2021. "As the yen continues to weaken, Bitcoin offers a non-sovereign store of value that has, and may continue, to appreciate against traditional fiat currencies," Metaplanet said. |
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Market Insight: Stablecoin Expansion Has Stalled Since Bitcoin Halving |
The expansion of stablecoins has stalled since the Bitcoin halving on April 20. The combined market cap of USDT, USDC and DAI, which have a combined stablecoin market share of over 90%, has fluctuated between $149 billion and $150 billion over the past three weeks. The consolidation comes after several weeks of an uptrend and may have bearish implications for the market, according to 10x Research. "Since the halving, we have seen nearly zero growth in stablecoin inflows, and bitcoin futures leverage has been dramatically reduced. Contrary to the bullish tweets about a post-halving rally, crypto users have voted with their money by withdrawing or pausing inflows," Markus Thielen, the firm's founder, said in a note to clients Monday. Traders widely use stablecoins to fund cryptocurrency purchases and derivatives trading. Hence the expansion of their supplies is said to represent an increase in inflows into the market, a bullish development, and a decline in supply is bearish. |
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- The chart shows the percentage change in the U.S. M2 from a year ago.
- M2 measures the money supply, including cash, checking deposits and other deposits readily convertible to cash.
- The M2 growth rate flipped positive in April, a positive sign for risk assets.
- "Simple rule ... liquidity leads risk assets," James Thorne, chief market strategist at Wellington-Altus Private Wealth, said.
- Source: fred.stlouisfed.org
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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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