The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. | | | Good morning, and welcome to First Mover. I'm Omkar Godbole here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off for the rest of the week.) In today's newsletter: - Price Point: Bitcoin was holding onto gains after U.S. GDP report early Thursday, changing hands just above $23K. Another crypto exchange succumbs to this year's contagion, as Zipmex files for bankruptcy protection in Singapore.
- JUST IN: U.S. gross domestic product (GDP) declined at an annualized pace of 0.9% in the second quarter, marking two consecutive quarters of economic contraction, Helene Braun reports. One widely used definition for a recession is when GDP contracts over two consecutive quarters. However, many economists – and even Federal Reserve Chair Jerome Powell at a press conference on Wednesday – have refrained from calling a recession.
- Market Moves: The crypto options market is abuzz as traders scramble to place bets ahead of Ethereum's upcoming "Merge," with open interest in the contracts now at a record.
- Chart of The Day: Ether has crossed above the Ichimoku cloud for the first time since April in an early sign of bullish revival.
| Want to receive our next market update at the end of the day? Subscribe to the Market Wrap newsletter below! | | | Bitcoin (BTC) was mostly holding steady early Thursday amid a classic risk-off move in traditional markets after data reported by the U.S. Bureau of Economic Analysis showed the world's largest economy unexpectedly contracted in the second quarter. While bitcoin declined from $23,200 to $22,600 in a knee-jerk reaction to the U.S. data, the cryptocurrency was still up 7% on a 24-hour basis – and back over $23,000 by press time. In traditional markets, the U.S. Dollar Index, which tracks the greenback's value against major fiat currencies, fell 0.3% to 106.60 and the 10-year Treasury yield slipped by five basis points (0.05 percentage point) to 2.74%. Ether (ETH) traded near $1,360, representing an 11% gain. Per data from Coinalyze, bearish futures positions worth $200 million have been liquidated in the past 24 hours. The forced closure may have added to bullish pressures around ether. Meanwhile, the number of open positions in ether options market rose to a new life time high of nearly 4 million as traders piled into call options or bullish bets on optimism the impending "Merge" would bring the bitcoin-like store of value appeal to the second-largest cryptocurrency. (Read more on this below in Market Moves.) Zipmex files for bankruptcy The troubled crypto exchange Zipmex filed applications in Singapore seeking protection against bankruptcy amidst the threat of legal actions from creditors. Such filings in Singapore grant relief for 30 days or until the Singapore Court makes a decision on the application. Last week, the Singapore-based exchange blocked users from taking direct custody of their coins, sparking fears of an eventual bankruptcy. Nirvana Finance, a Solana-based yield protocol, suffered a $3.5 million exploit, with attackers using flash loans to drain its liquidity pools. Nirvana's native token crashed on the news and its NIRV stablecoin lost the dollar peg, falling to 8 cents.
Bipartisan legislation that could establish U.S. regulations for stablecoins has formally been delayed until after the August congressional break. The Treasury Department won't endorse the bill unless it also ensures the industry exchanges keep their money separate from the companies' assets, which would protect them if the firms fail, CoinDesk reported.
A study published by the European Central Bank early Thursday said the central bank could set a limit on the number of digital euros in circulation to prevent outflows from traditional banks. Economists put an estimate of optimum amount of digital euros in circulation between 15% and 45% of the gross domestic product. Elsewhere, the Law Commission of England and Wales – a statutory independent body tasked with reviewing and updating the law – said it wants to apply personal property rules to crypto and non-fungible tokens. That would make it easier for crypto investors to initiate legal action in case of losses suffered due to hacks or scams. | | | Ether options market abuzz ahead as 'Merge' Optimism Drives Demand By Omkar Godbole | Open interest in ether options market has been rising ahead of Ethereum's Merge, expected in September (Laevitas) | The number of open positions in ether's (ETH) options market has reached a record high as an updated timeline for Ethereum's long-awaited supposedly bullish "merge" has spurred demand for call options. Open interest, or the number of options contracts traded but not squared off with an offsetting position stood at a new lifetime peak of near 4 million, according to data from major exchanges, including Deribit, tracked by Swiss-based derivatives analytics firm Laevitas. The previous peak of around 3.5 million was registered in the second quarter. "The desk has traded an incredible amount of ETH calls this week, over 250,000 ETH notional," the Singapore-based options trading giant QCP Capital noted in a Telegram chat. "A few hedge fund names have been large buyers of the ETH calls and the overwhelming demand has brought September volumes up to 100%," the trading firm said, adding, "We expect this demand to continue as we approach the merge in September." Also read: Ether Dominates Futures Trading as Shorts See $200M in Liquidations | Omkar Godbole's Chart of The Day | Ether tops the Ichimoku cloud | | | Chart showing ether's bullish breakout above the Ichimoku cloud. (Source: TradingView) | - Ether has crossed above the Ichimoku cloud for the first time since April in an early sign of bullish revival.
- Crossovers above or below the cloud, created by Japanese journalist Goichi Hosoda in the late 1960s, are widely taken to represent early signs of a bullish or bearish trend change.
- The indicator comprises two lines – the leading span A and the leading span B – plotted 26 days ahead of the last candle to indicate future support or resistance.
- Ether has resistance at $1,782, the 100-day simple moving average. On the downside, the red line or the leading span B of the ichimoku cloud at $1,520 could offer support.
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- Matthew Ball, managing partner, EpyllionCo
- Adam Levitin, professor of law, Georgetown University Law Center
| | | Where innovators, changemakers, investors and leaders present their best ideas for investing in the future of the Web 3, digital assets, blockchain and crypto ecosystems. Register now. | | | Today's newsletter was edited and produced by Bradley Keoun. | 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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