By the CoinDesk Markets Team Edited by Bradley Keoun
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TODAY:Bitcoin (BTC) +0.2% $13,005 | Ether (ETH) +0.7% $418 (@11:02 UTC)Price Point: Bitcoin is on a seven-day winning streak, longest since April.Market Moves: Chainalysis Chief Economist Philip Gradwell tips his five favorite blockchain data points for analyzing cryptocurrency markets. Bitcoin Watch: Breakout looks likely on weekly price chart, which could clear path to $14,000, CoinDesk's Omkar Godbole writes.What's Hot: PayPal reportedly mulling BitGo acquisition, BitMEX leaps back into product-launch mode, Turkish lira's weakness shows limits of central bank policy flexibility.
PRICE POINT
Bitcoin was higher, just above $13,000 and rising for a seventh straight day — the longest winning streak in six months. “A continuation would probably require more positive news,” Matt Blom, head of sales and trading for the publicly traded cryptocurrency firm Diginex, wrote Thursday in a note to clients. In traditional markets, European indexes rose on positive corporate earnings and strong German manufacturing data, and U.S. stock futures pointed to a higher open. Gold strengthened to $1,911 an ounce.
MARKET MOVES
A hallmark of the blockchain analysis is that there's all sorts of data on the distributed computing networks available publicly to anyone with a browser. So for crypto traders, why not use the data to get an edge? CoinDesk's Omkar Godbole talked to Philip Gradwell, chief economist at blockchain intelligence firm Chainalysis, about the data points he thinks are most important for crypto traders. Below is a condensed list, though Godbole's full article includes a link to a video of the original interview. 1) Exchange inflows. A surge in a rising market might indicate looming selling pressure, a sign of feeble investor confidence. 2) Trade intensity. The metric, which measures the number of times an inflowing coin is traded, "tells us how many people are willing to buy bitcoins sent to exchanges," according to Gradwell. So an uptick is a sign of trend strength. 3) Interexchange flows. Net flow from crypto-to-fiat exchanges to crypto-to-crypto exchanges suggests the market is dominated by stablecoin traders. In this scenario, a rise in the stablecoin's issuance could be considered a leading indicator of an impending price rally. 4) Liquidity. A sustained rise in the number of illiquid entities — defined as those that send less than 25% of the assets it receives — is a sign of a strong long-term holding sentiment, and thus a bullish indicator. 5) Value transfers across blockchains. The metric represents usage of the blockchain and is typically accompanied by a rise in the transaction count. "When there's greater usage of a cryptocurrency there's more demand, and that drives the price up," Gradwell said. - Omkar Godbole Read More: Five On-Chain Indicators Investors Should Follow Bitcoin's liquidity, as measured by Chainalysis, is as low as it was in mid-2017, just before the cryptocurrency went on a meteoric run from $5,000 to $20,000. (Chainalysis.)
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BITCOIN WATCH
Bitcoin weekly price chart. (TradingView)
Bitcoin is eyeing its biggest weekly gain in six months. The cryptocurrency is currently trading near $13,000, representing a 13% appreciation on a week-to-date basis, the most since April. The Chicago Mercantile Exchange’s share of bitcoin’s futures market has increased alongside the price rally. As of Thursday, bitcoin futures contracts worth $790 million were open on the CME, according to data source Skew. That's 15.8% of the global open interest tally of $5 billion – the second highest contribution among major exchanges. The exchange's contribution to global open positions has jumped from 10% to 15.8% this month alone, indicating increased institutional participation. From a technical analysis perspective, the focus is on the weekly close (Sunday, 23:59 UTC). If the cryptocurrency finishes above $12,476 (August high), a bullish breakout would be confirmed on the weekly chart. That looks likely, as demand for the cryptocurrency is strong. A breakout would strengthen the case for a rally to $14,000 before the year-end. - Omkar Godbole Read More: CME’s Rise in Bitcoin Futures Rankings Signals Growing Institutional Interest
TOKEN WATCH
Bitcoin (BTC): Hedge fund billionaire Paul Tudor Jones II tells CNBC that bitcoin rally is only in "first inning." Tether (USDT): Chinese authorities crack down on gambling sites using dollar-linked stablecoin. Ripple (XRP): CEO Brad Garlinghouse says blockchain payments company might move to London amid lingering uncertainty over XRP token's legal and regulatory classification.
WHAT'S HOT
PayPal is exploring purchases of cryptocurrency companies including bitcoin custodian BitGo (CoinDesk) BitMEX, under scrutiny from U.S. officials, proceeds to list new futures contract on Yearn.Finance's YFI token, says contracts for polkadot (DOT) and Binance coin (BNB) are on the way. (CoinDesk) Bitstamp, European cryptocurrency exchange, names Gemini alum Julian Sawyer as CEO (CoinDesk) Spanish national police arrest operator of cryptocurrency arbitrage firm that some investors alleged to be a Ponzi scheme (CoinDesk) PayPal's push into digital currencies could benefit mass crypto adoption, Morgan Stanley says (CoinDesk)
ANALOGS The latest on the economy and traditional finance
Turkish lira weakens toward 8 per dollar after central bank declines to raise interest rates to tamp down inflation expectations (FT) Goldman Sachs agrees to pay $2.9B to resolve probes into 1MDB debacle involving Malaysian financier (CNBC) The number of employees globally that permanently work from home is set to double by 2021 (Reuters) The U.S. Consumer Financial Protection Bureau is seeking to change rules governing the access and use of consumer financial data (Reuters)
Singapore and Germany are setting up a "green lane" enabling travel for business or official reasons amid coronavirus restrictions (Bloomberg)
TWEET OF THE DAY
With the U.S. Election Day two weeks away and mail-in ballots coming in, much is at stake - including crypto policy over the next four years.
Like it or not, this election will matter for the crypto industry. Our latest limited-run newsletter, The State of Crypto: Election 2020 by regulatory reporter Nikhilesh De, aims to walk you through why.
At stake: Will new crypto products be approved or allowed to operate in the U.S? Will regulators target more overseas exchanges and platforms like BitMEX? Will the U.S. launch a “digital dollar” or some other form of central bank digital currency?
These questions will come down to who takes the reins at the various financial regulators and government departments. Over the next several days, we'll map out the possible outcomes and introduce analysis of the candidates.
2020 has not been a good year by most metrics. There is no way to avoid this in a year-end retrospective.
Every year, CoinDesk recognizes the “Most Influential” people working to expand cryptocurrency and blockchain’s reach. It’s a list of the 10 outsized individuals who have gone the furthest and done the most.
In this most unusual year, we need your help determining who should be named as Most Influential. Check out the list of the top contenders and cast your vote by Oct. 31.
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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