Aug 16, 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: Ether makes gains as BTC struggles and dogecoin surges overnight ahead of its "dogechain" launch. Huobi Global announced it will stop offering derivatives trading services to users in New Zealand.
Market Moves: Could a BTC bottom indicator have marked a price bottom for the cryptocurrency?
Chart of The Day: A risk reset in equities contributes to ether rally.

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Price Point

After attempting to maintain the $25,000 mark yesterday, bitcoin (BTC) dropped to lows of $23,788 overnight, trading down on the day. Perhaps this is an indication that the world's largest cryptocurrency by market value's two-month rally has come to an end.

Bitcoin 24-hour price chart. (CoinDesk)

Meme-token Dogecoin was up 15% over the last 24 hours. One analyst said that the token is rallying ahead of its launch of "dogechain," which requires wrapped doge for trading.

Unlike BTC, ether (ETH) was up slightly on the day, trading at around $1,900. According to a report from research firm FSInsight, ether has a good chance of exceeding bitcoin in market cap over the next 12 months because the Ethereum blockchain's switch to a proof-of-stake (PoS) mechanism will reduce both the production of the tokens and selling pressure from miners.

A report from CoinShares showed that crypto funds had $17 million in outflows in the seven days up to Aug. 12, ending six consecutive weeks of inflows. Bitcoin (BTC) investment products saw $21 million in outflows, and short bitcoin positions, which bet on a price decline of the largest cryptocurrency by market capitalization, had $2.6 million in inflows.

Cryptocurrency exchange Huobi Global announced it will stop offering derivatives trading services to users in New Zealand starting next week, just a couple of months after expanding operations to the country. The Seychelles-based cryptocurrency exchange cited "local compliance policies" as the reason for withdrawing margin trading services, options and ETPs as of next week.

Celsius Network, the crypto lender that filed for bankruptcy in July, appears to be in even worse financial straits than previously signaled. A new court filing Monday from Kirkland & Ellis, a law firm the crypto lender hired to lead its restructuring efforts, included financial projections that Celsius will run out of cash by October.

In Latin America, Brazil's largest brokerage, XP, launched bitcoin and ether trading. The company, which has 3.6 million customers, hopes to reach 200,000 active crypto users by the end of 2022.

Bitcoin (BTC)

See the latest price here

Ether (ETH)

See the latest price here

Market Moves

Is This The Most Reliable BTC Bottom Signal?

Puell Multiple, a bottom signal for bitcoin, currently sits at 0.54, and values under 0.50 have historically marked price bottoms and are considered to be good accumulation zones.

The indicator fell to 0.34 in July - the lowest it has gone since 2019 according to data from Delphi Digital.

The Puell Multiple is the daily issuance of BTC (in USD) divided by the 365-day moving average of the daily issuance of BTC (in USD). It compares the short-term revenue of BTC miners to its longer term trend. A lower score equates to lower revenue for miners.

Since 2014, the Puell multiple has gone below 0.50 only 4 times: during the previous market bottoms of 2015 and 2019, the Covid-induced crash of Spring 2020, and most recently in July 2022, according to Delphi Digital.

Delphi Digital notes that even as the Puell multiple seems to indicate a market bottom, other indicators must be used in tandem to conduct a meaningful analysis.

Chart of The Day by Omkar Godbole: Risk Reset in Equities Contributes to Ether Rally

Chart tweeted by pseudonymous analyst Cantering Clark shows ether's recent rally has been accompanied by an uptick in the S&P 500, Wall Street's benchmark equity index.
Perhaps, the Merge is not the only factor driving ether higher and the native token of Ethereum's blockchain may find it hard to continue gaining ground in the weeks ahead if stocks turn lower.

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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
Dogecoin	DOGE	+13.2%	Currency
XRP	XRP	+1.3%	Currency
Cardano	ADA	+0.9%	Smart Contract Platform

Biggest Losers

Asset	Ticker	Returns	DACS Sector
Terra	LUNA	−1.9%	Smart Contract Platform
Loopring	LRC	−1.7%	Smart Contract Platform
Solana	SOL	−1.3%	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 Miner PrimeBlock Cancels Listing Plans, Terminates $1.25B Merger With 10X Capital
The two firms terminated their agreement, which would have allowed Prime Blockchain to go public, by mutual consent on Aug. 12.
Huobi to End Crypto Derivatives Trading in New Zealand
The Seychelles-based cryptocurrency exchange cited "local compliance policies" as the reason for withdrawing margin trading services, options and ETPs as of next week.
Former CFTC Commissioner Dawn Stump Joins Crypto Risk Monitoring Firm Solidus Labs as Advisor
The appointment reflects the broader trend of former top government officials taking roles at crypto firms after departing from their public service roles.
Crypto Traders Bet on Ether Staking Yields Jumping to 8% Post Merge
Yields on staked ether are projected to double to 8% and higher from the current 4%. Traders are using Voltz's interest rate swaps to profit from an expected bump in staking yields.
FSInsight: Ether May Well Surpass Bitcoin's Market Cap in Next 12 Months
If the blockchain's Merge occurs as planned, the ether issuance rate will drop and daily selling pressure will reduce, the research firm said.
DeFi Firms Iron Bank, Yearn Finance Join Layer 2 Protocol Optimism
Developers of the DeFi protocols said that layer 2 networks offer improved security and capital efficiency for users.
Acala Stablecoins Nears $1 Peg After Community Burns 1.2B aUSD Minted by Exploiters
Developers said trace reports were underway to identify the transactions performed by the 16 wallet addresses connected to the exploit.
Crypto Lender Hodlnaut Applies For Creditor Protection in Singapore
Hodlnaut is looking to appoint a judicial manager to avoid liquidating customer assets at a loss.

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.

Travis Kling, founder and CIO, Ikigai Asset Management
Ryan Selkis, CEO, Messari
Dawn Stump, former commissioner, CFTC

The Investing in Digital Enterprises and Assets Summit facilitates capital flow and market growth by connecting the digital economy with traditional finance through the Presenter's Mainstage, capital allocation meeting rooms and sponsor expo floor. Use code FM_20 for 20% off the General Pass. Register now.

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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.