The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk News Reporter Was this newsletter forwarded to you? Sign up here. |
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Happy Friday! Here’s what you need to know in crypto today. |
Bitcoin trades at around $61,300.October's rallies generally don't pick up until later in the month, data show.U.S. election will underpin "debasement trade" which could favor BTC, says JPMorgan. |
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CoinDesk 20 Index: 1,8691.17 +1.14% Bitcoin (BTC): $61,425.69 +0.92% Ether (ETH): $2,381.70 +0.9% S&P 500: 5,699.94 -0.17% Gold: $2,659.14 +0.13% Nikkei 225: 38,635.62 +0.22% |
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Bitcoin's slow start to its historically most bullish month continued late Thursday with a brief dip below $60,000 only to show signs of a rally ahead of the weekend. The cryptocurrency traded at around $61,300 during the European morning, an increase of just under 1% in the last 24 hours. The broader digital asset market has risen by about 1.15%, as measured by the CoinDesk 20 Index. BTC is down around 6% since the start of October and bitcoin ETFs have registered net outflows on all three days of the month so far. This is despite its reputation as being BTC's most bullish month, with average gains of 22% since 2013. |
Despite October's reputation for being a fertile month for BTC surges, data shows that most gains don't arrive until the second half of the month. The second and third days of October have ended in green just six times since 2013 before recovering in the second week, and large movements are generally in the third week, CoinGlass data show. Price jumps of as high as 16% generally appear after Oct. 15. However, this year bitcoin bulls must also consider the macroeconomic factors weighing on risk assets. Escalating tensions in the Middle East have seen investor sentiment shift toward oil and gold. Geopolitical tension and the upcoming U.S. presidential election will likely underpin the 'debasement trade,' and this favors both bitcoin and gold, JPMorgan said in a research report on Wednesday. "A Trump win in particular, apart from being supportive of bitcoin from a regulatory point of view, would likely reinforce the 'debasement trade' both via tariffs (geopolitical tensions) and via an expansionary fiscal policy ('debt debasement')," analysts wrote. If the "Trump trade" plays out in a similar way to 2016, there should be higher U.S. Treasury yields, a stronger dollar, U.S. stock market outperformance, in particular banks, and tighter credit spreads, JPMorgan said. This shift has not happened yet, with only a small move higher seen in these markets. |
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Market Insight: Bitcoin Set for Unusually Busy Weekend After Friday's Payrolls Data |
The bitcoin bull run since last year has seen mostly quiet weekends, but that may be about to change. Bitcoin's "implied volatility term structure" indicates bigger price swings on Saturday (Oct. 5) than on days leading up to Oct. 25, according to Deribit options data tracked by Arbelos Markets. The term structure is a graphical representation of options-determined implied or expected volatilities (IV) at different expiration dates. It is usually upward sloping, with longer duration options trading priced in terms of implied volatility relative to short duration ones. However, as of writing, the curve exhibited a kink, with options expiring on Oct. 5 trading at an annualized IV of 51.44%. In other words, traders are pricing more significant price swings for Saturday, possibly anticipating increased volatility following Friday's nonfarm payrolls release and amid geopolitical tensions, according to Joshua Lim, co-founder of Arbelos Markets. "There's a very noticeable kink in the vol curve – Friday is trading around 39 vol and Saturday is trading 51 vol. The market is pricing in a risk premium from nonfarm payrolls data, but more importantly, some probability of an Israeli retaliation post-Rosh Hashanah," Lim told CoinDesk. |
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The chart shows monthly changes in bitcoin's yen-denominated prices.The long tails attached to the previous two candles suggest seller exhaustion near the previous record high of 7.79 million JPY reached in November 2021.The rebound from the previous peak suggests renewed bullish price action ahead.Source: TradingView |
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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. |
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