First Mover Americas: Bitcoin Eyes US Data Deluge, Charts Signal Seller Fatigue

Good morning, and welcome to First Mover, our daily newsletter putting the latest moves in crypto markets in context. Sign up here to get it in your inbox each weekday morning.

Here’s what’s happening this morning:

• Market Moves: Bitcoin recovers as the West's sanctions on Russia were softer than feared.
• Featured stories: Bitcoin's technical charts signal seller fatigue.

And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9 a.m. U.S. Eastern time. Today's show will feature guests:

• Christopher Giancarlo, senior counsel at the Willkie Farr & Gallagher law firm in New York and a former chairman of the U.S. Commodity Futures Trading Commission
• Yaya J. Fanusie, chief strategist at Cryptocurrency AML Strategies

Market Moves

By Omkar Godbole

Bitcoin held on to its recovery from one-month lows early today, while European and Asian stocks gained ground and the safe-haven dollar dropped as the West's sanctions on Russia were softer than feared.

Alternative cryptocurrencies led the broader crypto market recovery, having taken a bigger hit on Thursday. Layer 1 coins like LUNA, FTM and DOT were notable gainers along with GNT, the native coin of decentralized peer-to-peer network Golem, which boasted a 60% gain on a 24-hour basis.

The crypto market risk reset looked to continue, going by how options traders priced expectations for bitcoin's price turbulence over different time frames and positive news flow from the war front.

"President Xi Jinping has just spoken with his Russian counterpart on the phone. President Vladimir Putin said that Russia is willing to have high-level dialogue with Ukraine," Hua Chunying, a spokeswoman for China's Foreign Ministry, tweeted.

During North American trading hours, the focus will be on Wall Street and the U.S. economic data, which could sway expectations of how aggressive the Federal Reserve would be in scaling back stimulus.

According to investing.com, data due at 13:30 UTC is expected to show that U.S. personal spending rose 1.6% from the prior month, beating December's print of -0.6%. Durable goods orders for January, also due at 13:30 UTC, are expected to rise by 0.8%, after falling 0.7% the previous month. Lastly, the core personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation, is forecast to rise to 5.1% on the year in January.

A big beat on expectations may cement the case for a 50 basis point interest rate hike next month, bringing renewed selling pressure to bitcoin and other risk assets. Several Fed officials have recently expressed support for a 50 basis point move in March. On Thursday, markets priced out prospects of such a move after Russia invaded Ukraine.

Also read: Crypto Market Capitalization Slumps to $1.5T as Russia Attacks Ukraine

Latest Headlines

• Bitcoin's Implied Volatility Suggests Recovery Set to Continue
• Short Positions See $143M in Liquidations as Bitcoin, Ether Gain 10%
• Terra’s LUNA Surges 27% to Regain $25B Market Capitalization
• Two European Soccer Clubs Cancel Bitci Sponsorship Deals: Report
• Ethereum Mining Pool Flexpool Halts All Services to Russia in Wake of Ukraine Invasion
• First Mover Asia: India Crypto Firms, Regulators Continue Their Regulatory Debate; Bitcoin Recovers From a Post-Invasion Freefall

Charts Signal Seller Fatigue

By Omkar Godbole

Bitcoin formed a long-legged daily candle on Thursday with a SWIFT recovery from one-month lows of under $33,500. The candle engulfed the preceding day's losses.

Long-legged candles indicate that sellers initially controlled the market only to be overpowered by buyers ahead of the UTC close. Thus, long-legged candles imply bear fatigue, mainly when they occur at multi-month lows or after a prolonged sell-off, as is the case with bitcoin.

That said, a strong follow-through remains elusive. "On bitcoin, yesterday saw a combined Key Reversal Up & Bullish Engulfing Pattern. However, there has been no follow-through higher today," Eddie Tofpik, head of technical analysis and senior markets analyst at London-based ADM Investor Services International, wrote in a LinkedIn chat.

Chart-based traders usually want to see a strong follow-through after long-legged candles before calling a bullish trend change. So, Friday's UTC close is pivotal. A close above Thursday's high of $39,720 would confirm the reversal higher.