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| The latest moves in crypto markets, in context Edited by Parikshit Mishra (Substituting for Omkar Godbole) January 6, 2022 Sponsored by If you were forwarded this newsletter and would like to receive it, sign up here.
Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Bitcoin falls below $43,000 and breaches key support level after U.S. Federal Reserve minutes reveal more hawkish-than-expected tilt on inflation – leading to nearly $800 million worth of crypto futures being liquidated. PLUS: Other top cryptocurrencies, including Polkadot, Solana, tanked on Thursday, driven by broader sell-off.And 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. Today's show will feature guests: George Kaloudis, research associate, CoinDesk Ridley Plummer, metaverse and NFT project manager, Australian Open Adam De Cata, blockchain studio and metaverse specialist, Run It Wild
Market Moves By Shaurya Malwa and Bradley Keoun Bitcoin broke below the $46,500 support level on Wednesday. (TradingView) In the last 24 hours, crypto futures worth over $812 million were liquidated as bitcoin broke its $46,000 support level and fell to $43,000, according to data from analytics tool Coinglass.
Adding to the market pressure were indications that the Bitcoin blockchain's hashrate – a gauge of the network's computational security – fell amid protests in Kazakhstan, which brought a nationwide internet blackout. The country had become one of the biggest destinations for crypto-mining operations following last year's exodus from China.
Liquidations occur when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin. This happens primarily in futures trading, which only tracks asset prices, as opposed to spot trading, where traders own the actual assets.
A drop in bitcoin prices led to altcoin markets seeing deep cuts. Over 200,000 positions were liquidated in the past 24 hours, with a bulk of the losses coming during the U.S. hours.
Here's what analysts and crypto industry executives are saying about the latest market sell-off: "We probably would not bet the farm near-term on BTC" – Sean Farrell, digital-asset analyst, FundStrat "Support levels are cushions, not precise points, so we would make sure breakdowns are confirmed on a consecutive closing basis before acting on them. Secondary support for bitcoin is near $37.4K and for ether near $3,284" - Katie Stockton, founder, Fairlead Strategies "The 'don't fight the Fed' mantra may already be pressuring the broad crypto market, with companionship from peaking commodities" – Mike McGlone, senior commodity strategist, Bloomberg Intelligence "The downward pressure on the price is expected to continue until the market fully prices in the tighter-than-expected future monetary policy. Furthermore, from a technical perspective, bitcoin has had a breakdown from the $45K-$52K range, and this could be a signal for another leg down" – Yuya Hasegawa, crypto market analyst, Bitbank. "For a few weeks now, we’ve been clearly in a downtrend and there are no signs of a decisive reversal in sight. However, striking similarities between the current price action and the market moves between mid-May and August do give reasons for cautious optimism in the medium term. A bounce to around $47K in the next few days could corroborate that thesis while further losses would largely invalidate it" – Mikkel Morch, executive director and risk management, ARK36"There is currently no sign of a rebound" – Du Jun, co-founder of Huobi Group Read More: Bitcoin Falls Below $43K, Leads to $800M Crypto Liquidations
Polkadot, Solana Biggest Losers in Sell-Off By Shaurya Malwa Plunge (Shutterstock) Top cryptocurrencies saw deep losses in the past 24 hours, retreating in sync with bitcoin.
Among the top 10 cryptocurrencies by market capitalization, the tokens of Ethereum rivals Avalanche (AVAX), Terra (LUNA), and Solana (SOL) – the so-termed ‘SoLunAvax’ trade – fell as much as 12% in the past 24 hours. Polkadot (DOT), another Ethereum rival, saw its tokens fall by 14% before seeing a slight revival in Asian hours on Thursday.
DOT support levels and RSI readings. (TradingView) SOL fell from the support level of $167 to $144 during Asian hours on Thursday, temporarily reaching prices last seen in October 2021. The $130-$140 range remains crucial for SOL, according to the charts. Falling below that range SOL could drop to $78 if previous resistance levels are considered. SOL support levels and RSI readings. (TradingView) LUNA, which surged from $50 at the start of December 2021 to a high of $103 later that month, continued the downtrend it has witnessed since the past two weeks. Prices were at support levels of $75 during Asian hours on Thursday and dropping below the support could trigger a fall to nearly $50. LUNA support levels and RSI readings. (TradingView) Read More: Polkadot, Solana Biggest Losers Among Top Cryptos
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Crypto Prices Bitcoin (BTC) See the latest price here Ether (ETH) See the latest price here The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: Biggest Gainers: There are no gainers in CoinDesk 20 today.Biggest Losers:
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 Kazakhstan’s Hashrate Drops as Internet Blackout Persists Amid Nationwide Protests Thailand’s Crypto Traders to Be Subject to 15% Capital Gains Tax: Report Polkadot, Solana Biggest Losers Among Top Cryptos Bitcoin Falls Below $43K, Leads to $800M in Crypto Liquidations US Congress Organizing Oversight Hearing on Crypto Mining’s Environmental Footprint: Report Sygnum Valued at $800M in $90M Funding Round: Report Singapore Tycoons’ Sons Plan Private NFT Club That Will Become an ARC to the Metaverse: Report
New Money, a new series by CoinDesk, explores what it means to be part of the new “creator economy.” In the talk show hosted by Spencer Dinwiddie and Solo Ceesay, we hear from pro athletes, celebrities and social media influencers who are on the cutting edge of interacting directly with fans and developing new ways to generate revenue from their own celebrity. Learn more here.
ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:
Risk and Opportunity for Algorithmic Stablecoin, The Case for BlockbusterDAO "First Mover" hosts speak to Harvard Business School Professor of Business Administration Marco Di Maggio about the risk and opportunity for algorithmic stablecoin. Seth Ginns, CoinFund managing partner and head of Liquid Investments, analyzes crypto markets. Plus, taking a page from ConstitutionDao, will BlockbusterDAO succeed in its mission? Tasafila, founder of BlockbusterDAO, shares insights into the movement.
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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