First Mover Americas: Bitcoin to Post Sixth Straight September Loss, but LINK and UNI Manage Gains

• Price Point: September has been a historically bad month for bitcoin, which posted losses for the last five years. Is October's record better?
• Market Moves: Bitcoin's bullish seasonality might be muddled by the continued slide in the USD Liquidity Index.
• Chart of the Day: Cryptocurrency exchange Coinbase's stock (COIN) debuted on Nasdaq in April 2021. Since then, the share price has been in a steady downtrend.

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Price Point

Bitcoin (BTC) was trading flat on the day after a choppy week of price movement. The world’s largest cryptocurrency by market value has traded in a range of $18,500-$20,380 over the week. After a painful week for both equities and government bonds, both markets posted modest gains.

Historically, September has been a bad month for bitcoin, with the crypto showing negative returns in each of the last five years. The string continued in 2022, with bitcoin lower by 2.95% for the month at press time. October, however, has a better historical record, with bitcoin posting gains in seven of the last nine years.

Ether (ETH) was also trading flat on Friday at around $1,337 and has lost 13% over the month.

Managing gains in September were the token of decentralized oracle network Chainlink (LINK), which advanced 17%, and Uniswap’s UNI which was up 6%.

“For Chainlink, the narrative that’s driving price performance is the partnership with SWIFT on a cross-chain interoperability protocol,” said Nauman Sheikh, head of treasury management and derivatives at Wave Financial, in an interview with CoinDesk.

“For UNI, it’s the continued growth in market share and volume along with being regarded as a long-term deep value play,” said Sheikh.

Caution is warranted, though, suggested Sheikh. “Given the macro environment, we can expect these outperforming tokens to quickly succumb to profit-taking, especially if bitcoin and ethereum begin to sell off more aggressively,” he said.

CoinDesk’s Omkar Godbole reported XRP and MKR, (the governance token of the peer-to-peer lending platform Maker), are rallying in an otherwise quiet crypto sector as markets await the release of the Federal Reserve's preferred measure of U.S. inflation: the core personal consumption expenditure index (PCE).

In other news, Spain’s largest telecom company, Telefónica, invested in local crypto exchange Bit2Me and will begin accepting crypto for payments.

Meanwhile, a study by the Basel Committee on Banking Supervision finds the world's largest banks are exposed to about 9.4 billion euros (US$9 billion) of crypto assets.

CoinDesk Market Index

Biggest Gainers

Asset Ticker Returns DACS Sector Perpetual Protocol PERP +6.86% DeFi Terra Luna Classic LUNA +5.69% Smart Contract Platform Alien Worlds TLM +5.34% Culture & Entertainment

Biggest Losers

Asset Ticker Returns DACS Sector Ethernity Chain ERN -10.23% Culture & Entertainment Badger DAO BADGER -7.41% DeFi Polymath POLY -3.75% DeFi

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.

Market Moves

Bitcoin's Bullish Seasonality Muddled by Continued Slide in 'USD Liquidity Index'

By Omkar Godbole

October has been a good month for bitcoin (BTC) and traders may be looking forward to capitalizing on the bullish seasonality, having seen the cryptocurrency hold steady through recent traditional market turmoil.

Bitcoin has put in a positive performance in October in eight out of the past 12 years, with an average return of around 30% according to historical data sourced from charting platform TradingView. In other words, October has generated positive returns 66% of the time.

However, one indicator tracking the U.S. dollar liquidity calls for caution on the part of the bulls.

The so-called USD Liquidity Condition Index has slipped to a 19-month low of $5.7 trillion, according to chart provided by TradingView.

"The Fed net [dollar] liquidity is falling off a cliff, a clear headwind for crypto asset prices," Lewis Harland, a researcher at Decentral Park Capital, said in a daily market update.

The index assesses the degree of dollar liquidity based on the interaction of three factors – the size of the Federal Reserve's balance sheet, the Treasury General Account (TGA) and the reverse repo balance held at the New York Fed.

The liquidity declines when the Fed's balance sheet contracts, the TGA and repo balances rise. On the contrary, an expansion of the Fed's balance sheet and a decline in the TGA and repo balances indicates an uptick in the dollar liquidity.

Read the full story here.

Chart of the Day

COIN Raises a Bear Flag

By Omkar Godbole

• Cryptocurrency exchange Coinbase's stock (COIN) debuted on Nasdaq in April 2021. Since then the share price has been in a steady downtrend.
• Recently, a bear flag has emerged on COIN's daily price chart, hinting at a potential move lower.
• "We remain cautious of the bear flag in COIN," Rob Ginsberg, senior analyst at Wolfe Research, said in a technical analysis note to clients. "A breakdown through channel support seems more than likely."

Latest Headlines

• Cryptocurrencies XRP, MKR Shine as BTC, ETH Hold Steady Ahead of US Inflation Figure:XRP climbed above its 200-day moving average while MKR hit a three-week high. A higher-than-expected figure for core PCE, the Fed's preferred measure of inflation, may inject volatility into markets.
• Elon Musk Was Mulling Creating a Blockchain-Based Social Media Firm Before Offering to Buy Twitter: A series of text messages released as part of ongoing litigation over the failed Twitter deal reveal the billionaire's vision for a social media platform that would charge users to put short messages on a blockchain.
• MicroStrategy Looks to Hire Software Engineer for Building Bitcoin Lightning Network Infrastructure: The new hire will also been tasked with designing decentralized finance (DeFi) technologies.
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