Bitcoin's Exchange Outflows Resume, Hawkish Fed Priced In?

The latest moves in crypto markets, in context

Edited by Omkar Godbole

December 13, 2021

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Good morning, and welcome to First Mover. Here's what's happening this morning:

Market Moves: Bitcoin's Exchange Outflows Resume

Technician's Take: Ether Holds Bullish Trendline

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.

– Omkar

Market Moves

by Omkar Godbole

Bitcoin and ether traded weak in Asia and Europe even as respective regional stock markets rose, ignoring the risk of the Federal Reserve (Fed) announcing an accelerated unwinding of stimulus later this week. Growth-sensitive metals like iron ore surged on speculation that China would open liquidity taps to arrest the further deterioration in the property sector.

Layer 1's, Web 3, gaming tokens, and most coins associated with decentralized finance (DeFi) tracked the top two cryptocurrencies lower. Decentralized exchange SushiSwap's SUSHI token stood out with 10% gains after Daniele Sestagalli, a top application developer on layer 1 blockchain Avalanche, proposed joining the platform in a post on the project’s governance forum.

Shiba inu rose 1% and OKEx's OKB token added nearly 3%. Meanwhile, scaling solution Polygon's MATIC cryptocurrency traded 5% lower, and BNB and SOL fell 1% each.

Caution was the name of the game, with market participants awaiting Wednesday's Fed rate decision. The central bank is expected to bring forward the timeline for the end of monthly bond purchases to March 2022 from mid-2022 and signal that it expects to start raising rates next year.

Fed fund futures appear well ahead of the curve, having already priced in a 25 basis point interest-rate increase in May. Further, rates markets are pricing in a 91% probability of five 25 basis point rises over the next two years.

So, the bar for a hawkish surprise appears to have been set relatively high. Bitcoin and asset prices, in general, could remain resilient unless the central bank hints at more aggressive tightening than is anticipated.

The departure of bitcoin from centralized exchanges has resumed, perhaps indicating investor confidence that much of the bad news has been priced in and the path of least resistance is to the higher side.

The seven-day average of net exchange flows (inflows-outflows) fell to -5,924 BTC on Sunday – the lowest reading since early August, according to data tracked by Glassnode.

Ether's six-month skew measuring the spread between put and call prices stands at 0, or neutral, versus mid-October's bullish print of -17%. Historically, a neutral six-month skew has preceded major ether price upswings.

Read the full story here:

Bitcoin Exchange Outflows Resume as Stock Markets Get Over Fed Jitters

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Biggest Movers

These are the biggest movers in the CoinDesk 20 over the past 24 hours:

Top Gainers:

There are no winners today in CoinDesk 20.

Top Losers:

Polygon (MATIC): -5.6%

Cosmos (ATOM): -3.5%

The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.

Technician's Take

by Omkar Godbole

Ether Holds Bullish Trendline

Ether's weekly chart (Source: TradingView)

Ether's broader outlook appears constructive, with the cryptocurrency holding the bullish trendline from July lows.

However, indecision evident from the narrowing price range of the previous two weekly Doji candles is cause for concern for the bulls.

A range breakout – a move above the previous week's high of $4,492 – is needed for bull revival and put record highs back on the table.

However, MACD histogram's bearish crossover favors a range breakdown, which, if confirmed, would expose the ascending 50-week MA, currently at $2,780.

ICYMI

In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:

US Inflation Hit Highest Level Since 1982 in November, Up 6.8% From a Year Ago, Stellar Foundation CEO on US Crypto Regulation

"First Mover" hosts are joined by Stellar Development Foundation CEO and Executive Director Denelle Dixon for a review of Wednesday's congressional hearing with crypto CEOs, as well as her take on the U.S. crypto regulation outlook. VanEck Head of Digital Assets Research Matthew Sigel provides market insights as the U.S. CPI number hit the highest in 39 years in November. Plus, CoinDesk Global Policy and Regulation Managing Editor Nik De sat down with one of the winners for CoinDesk Most Influential of 2021, Wyoming Senator Cynthia Lummis.

Latest Headlines

Big investors looking beyond bitcoin may take their first baby steps into ether, which has so far outperformed its layer 1 alternatives. But for how long?

Although Sushi has seen an exodus of developers and talent in the past months, the broader community isn’t losing hope.

However, the entire supply won’t get mined until February 2140.

Binance has already set up an entity for a global headquarters, the exchange’s CEO Changpeng “CZ” Zhao said.

Crypto Exchange AscendEX Hacked, Losses Estimated At $77M

Assets not affected have been transferred to cold wallets while the investigation is carried out, the exchange said.

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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