Crypto

Trailblazer in Asia: Bitcoin’s recent gains have been weak. What will increase its price? | Cryptocurrency

The US economy appears to be heading for a recession, if it hasn’t already. But it’s hard to predict how BTC and other cryptocurrencies will perform in the coming weeks.

Hello. Here’s what happens:

Price: Bitcoin and Ether are rising for the third day in a row.

Conclusions: What Will Lead to a True Bitcoin Rally?

Prices

  • Bitcoin (BTC): $23,841 +4.0%
  • Ether (ETH): $1,719 +5.1%
  • S&P 500 daily close: 4,072.43 +1.2%
  • Gold: $1,771 per troy ounce + 3.0%
  • Daily close yield on 10-year Treasuries: 2.68% −0.05

Bitcoin, Ethereum, and Gold prices are taken around 4:00 PM PT. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk indices is available at coindesk.com/indices.

Bitcoin, Ethereum and other major cryptocurrencies are rising again

James Rubin

Interest rates are rising. The gross domestic product (GDP) of the United States is declining.

But crypto investors liked what they recently heard about inflation-fighting efforts and a possible economic path as bitcoin, ethereum and most other major digital assets rally for the third day in a row.

Bitcoin recently traded around $23,900, gaining more than 4% in the past 24 hours as markets continued to take the latest moves by the US central bank to curb inflation and indicators showing the economy is slowing but not falling into recession. . The largest cryptocurrency by market capitalization topped $24,000 for the first time in more than a week at one point despite a steeper than expected drop in GDP.

Ethereum, the second-largest cryptocurrency by market capitalization after Bitcoin, jumped above $1,700 for the first time since early June. Other major cryptocurrencies were in the black, with ETC and BCH up over 20% at one point.

“Risk appetite has returned from the second consecutive downturn in the US economy, raising the possibility that the Fed plans to tighten policy at a slower pace at the next policy meeting in September,” Edward Moya, senior Americas market analyst for Oanda, wrote. in an email.

Moya noted gains in stock markets that also rose for the third day in a row: the tech-focused Nasdaq, the tech-focused S&P 500, and the Dow Jones Industrial Average were up more than 10%. . But he also issued a caveat, writing that while the rally in risky assets has been a boon for the cryptocurrency, “traders shouldn’t be surprised if stocks ‘end up disappearing’.”

Economic Uncertainty

The GDP report released on Thursday added to the uncertainty about the global economy, which has suffered one blow after another for more than nine months. GDP contracted at an annualized rate of 0.9% in the second quarter, marking two consecutive quarters of an economic downturn that many economists traditionally define as a recession. Data released on Thursday morning by the US Department of Commerce came in worse than the consensus forecast of a 0.5% contraction, but slightly better than whispers of a 1% or more decline. GDP fell 1.6% in the first quarter.

However, many economists – and even Federal Reserve Chairman Jerome Powell and US Treasury Secretary Janet Yellen – refrain from calling it a recession because other factors, such as the labor market, are showing signs of a strong economy. The government and the Fed rely on the National Bureau of Economic Research (NBER) to declare a recession that takes into account employment, personal income and industrial production, in addition to GDP.

Yellen told reporters Thursday after the GDP announcement that the definition of a recession is “a widespread weakening of the economy” and “it’s not something we’re seeing right now.”

On Wednesday, investors reacted favorably to a 75 basis point rate hike by the US central bank and Powell’s dovish signals that the Fed might not have to raise rates in a few months.

Meanwhile, the cryptocurrency bankruptcy roll call lengthened on Thursday as beleaguered cryptocurrency exchange Zipmex filed lawsuits in Singapore seeking protection from the threat of lawsuits from creditors. Zipmex lawyers Morgan Lewis Stamford filed five petitions on July 22 on behalf of the firm’s various organizations demanding a moratorium on litigation for up to six months.

U.S. banking regulators have ordered crypto lender Voyager Digital to stop making false claims that the company is government insured. Earlier this month, Voyager Digital filed for Chapter 11 bankruptcy in a US court.

Oanda’s Moya will be looking into the bitcoin box to at least maintain its current upper threshold, a sign that the crypto winter is “really over.”

“Bitcoin is facing preliminary resistance at $24,000, but if it fails to contain traders’ price, it could expand to the $27,500 level,” he wrote.

Biggest Winners

Asset Ticker Return Sector DACS Loop CRL +11.2% Solana SOL smart contract platform +8.0% Polygon MATE smart contract platform +7.1% Smart contract platform

The Biggest Losers

There are no losers in CoinDesk 20 today.

Knowledge

What will fuel the real Bitcoin rally?

Sam Reynolds

Bitcoin is rising again after the US Federal Reserve announced a 75 basis point hike in interest rates to fight sustained inflation, meet and exceed expectations.

Bitcoin reacted to this by up 10% within hours of the announcement and more than 5% on Thursday at one point when it topped $24,000 for the first time in a week.

Seeing the entire chart in green is a nice change from bear markets: sea of ​​red, daily lows.

But the $24,000 threshold is far from where we all thought it would get the institutional backing and the interest it generates. So how does he get out of this mess?

Stakeholders are not entirely sure. Everyone knows that bitcoin is a risky asset. But is his fate forever connected with his actions? After all, Bitcoin’s first use case and rally was in 2013 when Cypriot savers used it as an asset to hold capital during periods of risk, in stark contrast to the fact that it is a risky asset. Speaking at CoinDesk’s Consensus Festival 2022, Galaxy Digital CEO Mike Novogratz said bitcoin won’t be “trading long before the Fed backs off and weakens” and believes it will bottom, bottom, outperforming U.S. equities.

“Hopefully, by the fourth quarter, the economy will slow down enough that the Fed will say we are going to take a break, and then you will see the beginning of the next crypto cycle,” he said. “Then bitcoin will decouple from stocks and lead the markets. »

Bill Cannon, head of ETF portfolio management at Valkyrie Investments, a digital asset fund manager, believes bitcoin is pegged to equities and the macroeconomic environment dictates its price for the foreseeable future.

“Most signs point to the United States being in a recession, although President Powell has repeatedly insisted otherwise, and confirmation of this will likely send assets south,” Cannon said in an email to CoinDesk.

recession, right?

Cannon wrote that companies were held back by two things: Fed Chairman Jerome Powell declined to provide further rate guidance ahead of the September FOMC meeting, and also said “we need to have a sub-potential upside period to create sluggishness as well as easing.” labor market. »

“This is very similar to a recession, and we expect it to last longer than many people think – this will reduce all assets at risk, including bitcoin and other digital assets,” Cannon wrote.

While Powell declined to give an interest rate outlook, others see this latest rate hike meeting as the first sign of a more dovish Fed stance.

“We are seeing a very clear upside breakout that began before the release of the data as institutions are in heavy positions amid a more dovish stance by the Fed,” brokerage Secure Digital Markets wrote on Telegram’s CoinDesk channel earlier. reported.

The number continues to rise, but what brings it back to where it once was remains a mystery.

Important events

21:30 HKT/SGT (13:30 UTC): UK Money Supply M4 (Month/Year/June)

21:30 HKT/SGT (13:30 UTC): UK Mortgage Approvals (June)

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