First Mover Asia: Selling Crypto Due to Fed Policy; Cryptos Drop Slightly in Monday Trading

Cryptocurrency asset trading firm QCP Capital will follow up on comments from Federal Reserve President Jerome Powell later this week regarding their potential impact on digital asset markets.

Hello. Here’s what happens:

Price: Bitcoin and Ether are lower as investors worry about monetary policy and macro uncertainty.

Insights: Cryptocurrency asset trading firm QCP Capital blames the recent cryptocurrency sell-off on the warmongering of the Federal Reserve and the possible shutdown of ETH by Jump Capital.

Prices

  • Bitcoin (BTC): $21,216 −1.7%
  • Ether (ETH): $1,588 -1.9%
  • S&P 500 Daily Close: 4,137.99 −2.1%
  • Gold: $1,749 per troy ounce + 0.1%
  • Daily close of 10-year government bond yield: 3.04% + 0.05

Bitcoin, Ether and Gold prices will be taken at approximately 4pm PT. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information on CoinDesk indices is available at coindesk.com/indices.

Bitcoin is falling; Ether Drops, Though Investor Interest Resurfaces

By James Rubin

Bitcoin remained firmly above $21,000 on Monday afternoon, as investors continued to worry about upcoming comments from US Fed Chair Jerome Powell and the same macro uncertainty that swept markets from all sides for nearly a year.

The largest cryptocurrency by market value recently traded around $21,100, down about a full percentage point in the past 24 hours. BTC is down 10% in the past five days after the release of the Federal Open Market Committee (FOMC) meeting in July, suggesting the bank would maintain its current inflation prescription of 75 basis points, rate hikes. Powell is expected to announce the central bank’s intent later this week in a speech at the Fed’s annual economic symposium in Jackson Hole, Wyoming.

“Bitcoin momentum has evaporated as risky assets wane ahead of the Jackson Hole symposium,” Edward Moya, senior market analyst at Oanda, wrote in an email. “Too much of Wall Street expects inflation to take two years or more for the Fed to get inflation under control. »

Still, Moya hopefully added that Bitcoin’s weakness “didn’t match the selling pressure hitting stocks…a sign that investors aren’t ready to see prices retest the June lows.”

Ether offered a two-pronged story on Monday. The second-largest cryptocurrency by market cap recently changed hands below $1,600, a drop of more than 2% that brought ETH to its lowest level in nearly three weeks amid investor concerns. But as CoinDesk’s Jimmy He wrote, a report from data provider Kaiko revealed money was going back into the ETH futures market on Monday. “When the price fell below $1,600, we saw a significant increase in interest rates,” Kaiko noted.

Despite Ether’s recent decline, Arca’s chief investment officer Jeff Dorman has remained optimistic about future prices, saying in his weekly Two Satoshi newsletter that concerns about this are overblown. While long ETH is certainly a busy and wired trade, it’s probably still one of the best risk/return investment opportunities in digital assets right now,” Dorman wrote.

Other altcoins have been largely in the red on average trading volume, with SOL and SAND dropping more than 6% and 5% recently.

Stock markets largely correlated with cryptocurrency prices suffered the same concerns that plagued the cryptocurrency markets throughout the day. The tech-focused Nasdaq and S&P 500 both fell more than 2%, and the Dow Jones Industrial Average (DJIA) nearly as much as markets returned to the more risk-averse climate of early summer.

Moya noted that bitcoin could fall below $20,000 if the dollar, which has strengthened, continues down this path. “Bitcoin may have an argument for defending the $20,000 level, but it may be difficult to sustain that level if the king’s dollar continues to rise ahead of Fed Chair Powell’s speech at the Jackson Hole Symposium,” he wrote.

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The biggest losers

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Knowledge

The Roots of Today’s Crypto Sales

By Shaurya Malwa

Cryptocurrency markets took a beating over the weekend as Ether’s merger-driven rally weakened and general ‘risk’ sentiment lowered prices – with futures trading higher. $800 million in liquidations since Friday.

Ether is down 25% in the past week after soaring for almost a month. DOGE and SHIB fell more than 15% on Monday, while tokens powering the Avalanche, Polkadot and Solana layer-1 blockchains saw a drop to 12%.

In a Telegram broadcast on Monday, Singapore-based QCP Capital blamed two factors, the US central bank’s continued monetary hawkishness, for the slippage in the absence of a specific trigger, adding that it expected markets to would continue to trade sideways for weeks.

“Fed officials have been actively pushing back dovish rhetoric in the market,” QCP traders said. “This has caused stocks to stagnate and trade lower, yields soared and [the U.S. dollar] mobilization at all levels. »

“Talking about Jump dumping a large amount of ETH before the merger added to the rush to make a profit on ETH purchases,” the company added, citing prominent crypto trading firm Jump.Crypto.

QCP traders added that they saw “significant profit-taking”, ultimately leading to liquidations of leveraged long positions that built into a strong month-long rally, the effects of which were seen “mostly in ether”, which has historically been 130% up month.

The company said it would follow Fed Chair Jerome Powell’s speech at the Jackson Hole, Wyoming economic symposium on Friday because of the potential impact on markets.

Following the release of last Wednesday’s July minutes from the Fed, the consensus among central bank watchers is that Powell will signal further and steep rate hikes in his symposium remarks, with some traders saying the bitcoin technique has been tipped and the largest crypto by market could be the cap. see declines ahead, as CoinDesk reported, with some traders claiming bitcoin’s technical data is lower and the

Important events

08:30 HKT/SGT (00:30 UTC): Jibun Bank produces PMI (for now in August)

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