Aug 10, 2022

The latest moves in crypto markets, in context

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Good morning, and welcome to First Mover. I'm Lyllah Ledesma here to take you through the latest in crypto markets, news and insights.

In today's newsletter:

Price Point: BTC and ETH jumped in the minutes after the CPI data released figures lower than predicted.
Market Moves: The market share of bitcoin and stablecoins continues to fall as traders appear more comfortable with risk exposure.
Chart of The Day: Ether's key price indicator turns bullish.

Price Point

Bitcoin (BTC) jumped 2% to about $23,500 in the minutes after the U.S. consumer-price inflation (CPI) data was released. The core CPI was unchanged at 5.9% versus the expected 6.1%, a relief for markets.

Futures tied to the major U.S. stock indexes rose after the report. S&P 500 futures were up 1.7%; Dow futures gained 1.3%.

Ether (ETH) also traded up after the data was released, up 4% at $1,780. Head of Europe at Hashdex, Laurent Kssis, thinks that this might be a key support level for the cryptocurrency for a $2,000 target by the end of August.

Altcoins performed well Wednesday with Fantom (FTM) up 8% and AAVE by 6%.

"We increasingly seem to be entering a transitional period. Until recently, it was clear that most investors considered the market to be in the throes of a crypto winter, but this narrative is no longer as clearly defined," said Jason Deane, analyst at Quantum Economics.

Deane points to indicators in the market showing a possibility of a future recovery, "some soft indicators, such as the Fear & Greed Index as well as hard indicators such as volume transactions on exchanges, miner sell rates and even lightning network capacity data."

"That said, bitcoin is still very much traded by markets as a commodity and its price is still closely aligned with external market data," said Deane. "As a result, the influence of these factors can often offset asset specific data and that may well be what we're seeing here."

Musk sells Tesla shares

In the news, Tesla chief Elon Musk sold 7.92 million shares of the company, according to regulatory filings.

Musk, who has been meme cryptocurrency dogecoin's highest-profile supporter, confirmed the shares had been sold via a tweet. Responding to a tweet asking if the shares were sold, the billionaire replied "yes. In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don't come through, it is important to avoid an emergency sale of Tesla stock."

This has left him with a 15% stake in the company. Tesla stock was down 2.5% on the day.

Coinbase

A new lawsuit alleges that crypto exchange Coinbase executives misled shareholders about its public listing. A Coinbase shareholder is seeking damages from nine company executives and board members, CoinDesk's Sandali Handagama reports.

Shares of Coinbase Global (COIN) have fallen about 5% after the exchange said trading volume dropped substantially during the second quarter. According to a shareholder letter released Tuesday, customer trading activity amounted to $217 billion during the period, down from $309 billion in the first quarter of this year.

Despite this, Bank of America said in a research report on Tuesday that the exchange is well positioned to take market share during this crypto winter. It maintained a buy recommendation on the stock following the exchange's second-quarter results.

JPMorgan is less optimistic than Bank of America about the company in the near term, saying the crypto exchange's near-term outlook is "still grim."

Latin America

Mercado Libre, Latin America's largest e-commerce company by market value, plans to expand its crypto trading feature across the region after a successful start in Brazil.

In December, users of Mercado Pago, Mercado Libre's digital wallet, were allowed to buy and sell bitcoin, ether and stablecoin Pax dollar (USDP) in Brazil after an integration with Paxos blockchain infrastructure.

Contacted by CoinDesk, Mercado Libre did not provide details on exactly which countries were next in line for the product or any tentative dates, Andres Engler reports.

Bitcoin (BTC)

See the latest price here

Ether (ETH)

See the latest price here

Market Moves

Traders are rotating from bitcoin and stablecoins to altcoins

The market shares of bitcoin and stablecoins continue to fall as traders appear more comfortable with risk exposure, according to data from Arcane research via Luno's weekly market report.

Indexes have seen positive returns so far in August, with the small cap index leading the way with a 9% increase. Mid caps by 7% and large caps by 5%. Bitcoin saw the least gains, by 2%.

As bitcoin underperforms against altcoins, bitcoin dominance has dropped from a peak of 47% mid-June to 40.5% currently.

"As the market sentiment has improved, traders have been more interested in getting exposure to altcoins than bitcoin," said the Arcane Research report.

"As the market has gotten hungrier for risk, we also see the market

shares of stablecoins plummeting," wrote the report. Since the middle of June, USDT's market share has fallen from 8.1% to 5.9%.

Chart of The Day by Omkar Godbole: Ether's Key Price Indicator Turns Bullish

The weekly chart MACD histogram crossed above zero last week, indicating a bullish shift in the momentum.
According to Fairlead Strategies' Katie Stockton, ether now needs to clear resistance at $1,733. That would validate the MACD's bullish flip and open the doors for a continued rally toward the 200-day average at $2,250.
"If Ether clears $1,733 decisively and confirms a weekly MACD 'buy' signal, that would support an extended relief rally, with secondary resistance near the 200-day MA," Stockton said in a weekly analytics note published on Aug. 1.

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Learn more about Grayscale's publicly-traded products here. Investing involves risks and the possible loss of principal.

Crypto Prices

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

Biggest Gainers

Asset	Ticker	Returns	DACS Sector
Avalanche	AVAX	+2.3%	Smart Contract Platform

Biggest Losers

Asset	Ticker	Returns	DACS Sector
Terra	LUNA	−5.6%	Smart Contract Platform
Cosmos	ATOM	−5.3%	Smart Contract Platform
Dogecoin	DOGE	−3.6%	Currency

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

Unstoppable Finance Raises $12.8M to Build DeFi Wallet
The round, which was led by Lightspeed Venture Partners, saw participation from Rockaway Blockchain Fund and Fabric Ventures.
BofA: Coinbase Is Well Positioned to Take Market Share During This Crypto Winter
JPMorgan is less optimistic than Bank of America about the company in the near term, saying the crypto exchange's near-term outlook is "still grim."
More Than $600K Vanishes From DeFi Project Blur Finance as Developers Disappear
The project's Twitter feed and Discord channel have been deleted.
CoinFLEX Files For Restructuring in Seychelles
CoinFLEX will now seek approval from creditors for its restructuring plans.
At ETHSeoul, Ethereum Developers Turn Attention to Privacy and Users
Real-life use cases, privacy and making blockchain applications more accessible for retail users dominated the conversations at Ethereum's developer event in Seoul attended by CoinDesk.

What to watch:

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.

Michael Safai, managing partner, Dexterity Capital
David Carlisle, vice president of policy and regulatory affairs, Elliptic
Joseph Ayoub, research analyst, Citi

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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.