Plus, ether liquidity has declined since ETFs listed
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 sits just above $56,000.BTC's 200-day SMA is in danger of turning bearish.JPMorgan highlights lack of major catalyst to support crypto assets. |
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CoinDesk 20 Index: $1,773.25 −1.29% Bitcoin (BTC): $56,000.24 −1.27% Ether (ETH): $2,370.13 −0.8% S&P 500: 5,503.41 −0.3% Gold: $2,519.38 +0.09% Nikkei 225: 36,391.47 −0.72% |
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Bitcoin fell as low as $55,300 before recovering to trade around $56,100, down 1% in 24 hours and extending its seven-day loss to over 5%. The broader digital asset market as measured by the CoinDesk 20 Index (CD20) has dropped more than 1.3% over 24 hours. The U.S. government is set to release its nonfarm payrolls report for August later. If the reading is weak, as all the other economic data this week has been, it will strengthen the argument for an interest-rate cut of 50 basis points in September. |
Bitcoin's 200-day simple moving average is in danger of turning bearish as its upward momentum has slowed to a crawl for the first time since October. Since late August, the measure has averaged a daily increase of less than $50, a significant drop from the $200-plus moves seen earlier this year, according to data from charting platform TradingView. As of writing, the 200-day SMA was $63,840. The 100-day SMA recently moved below the 200-day SMA, confirming a bearish crossover. The averages signal a weakening bullish sentiment and growing caution consistent with the increasing macroeconomic uncertainty. At the end of August, the crypto market had dropped 24% from its March peak to $2.02 trillion, JPMorgan said in a research report. The bank highlighted the lack of major catalysts to support crypto assets in the face of challenging macroeconomic factors. Spot ether and bitcoin ETF flows were "somewhat uninspiring," JPMorgan said, adding that many viewed the launch of ETH ETFs as disappointing when compared with the bitcoin versions in January. Spot bitcoin ETF flows also disappointed, recording net outflows of $81 million in August. The bank said it awaits the next catalyst for development and "enhanced retail engagement." |
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Market Insight: ETH Market Liquidity Has Dropped by 20% Since ETFs Listed |
The listing of spot ether ETFs in the U.S. has not yet proven the positive driver for ETH liquidity that it did for BTC. Ether's order book liquidity has actually declined since the July 23 debut of nine ETFs, according to data tracked by London-based CCData. Since the ETFs' introduction, the average 5% market depth for ETH pairs on U.S.-based centralized exchanges has declined by 20% to roughly $14 million. At offshore centralized venues, it's dropped by 19% to around $10 million. That means it's actually now easier to move the spot price by 5% in either direction, a sign of reduced liquidity and increased sensitivity to large orders. "The liquidity has dropped by nearly 45% since its peak in June," Jacob Joseph, a research analyst at CCData, told CoinDesk. "This is likely due to the poor market conditions and the seasonality effects in the summer, often accompanied by lower trading activity." The measure refers to the amount of buy and sell orders within 5% of the mid-market price for an asset. Greater depth indicates strong liquidity and lower slippage costs. |
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The chart shows the number of ether held in wallets associated with centralized exchanges.The so-called exchange balance has increased by over 263,000 ETH ($624 million) since late August, a sign of investors looking to liquidate their holdings or use coins for derivatives trading.Source: CryptoQuant |
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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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