Market Wrap: Bitcoin Continues Its Upturn, Rests Comfortably Over $20.7K

Price Action

Bitcoin (BTC) continued its recent surge, cracking $21,000 at one point after Canada’s central bank raised its main interest rate less robustly than expected, and despite disappointing earnings late Tuesday by Google parent Alphabet and software giant Microsoft. The largest cryptocurrency by market capitalization was recently trading at about $21,700, up more than 2% over the past 24 hours amid the Bank of Canada’s approval of a 50 basis point (BPS) hike instead of 75 BPS. The bank noted its concerns about the slowing of the economy. Central bankers globally have been trying to tame inflation without sparking a steep recession. On Tuesday BTC topped $20,000 for the first time since Oct. 5.

Ether (ETH) was recently changing hands above $1,550, a more than 5% gain from Tuesday, same time, tacking onto its more than 11% increase of the following day. The second-largest crypto in market value has reached its highest level since mid-September.

Most major altcoins were well in the green, with popular meme coins DOGE and SHIB up more than 12% and 4%, respectively. The former’s rise comes amid the approaching close of billionaire entrepreneur and DOGE enthusiast Elon Musk’s acquisition of social media platform Twitter.

The CoinDesk Market Index (CMI), a broad-based market index that measures the performance of a basket of cryptocurrencies, climbed 3.09% over the past 24 hours.

Macro View

In traditional markets, U.S. stocks slumped after rising the previous two days as investors mulled over the tech industry’s struggles, which are likely to continue. Embattled social media platform.

• Meta Platforms (FB) reported third-quarter revenue of just $285 million for its Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations, according to its earnings report released Wednesday. That was short of the consensus of analyst estimates of $406 million, and down from $452 million in the second quarter.
• The tech-focused Nasdaq fell about 2%, while the S&P 500, which has a strong tech component, dropped 0.6%. The Dow Jones Industrial Average (DJIA) was roughly flat.
• Both Microsoft and Alphabet earnings results killed what was becoming a not too bad outlook for the economy,” wrote Edward Moya, senior market analyst for foreign exchange market maker Oanda.

In commodities, Brent crude oil, a measure of energy markets, rose to $94 per barrel, up about 0.27% from the previous day. Three weeks after OPEC announced it was cutting production, investors remain fretful about energy prices. Brent crude is up more than 15% since the start of the year. Safe-haven gold was up 0.7% at $1,664 per ounce.

Housing starts plunged nearly 11% in September, continuing a recent trend that some observers of U.S. monetary policy hope will enable the Federal Reserve to ratchet back its recent monetary hawkishness. The most recent decline comes as mortgage rates top 7%, reaching a two-decade high.

The University of Michigan’s monthly Consumer Sentiment Index on Friday will offer fresh insight into the public’s perceptions about the economy. “Bitcoin is now comfortably above the $20,000 level and now it will try to stabilize here until the [Fed’s Federal Open Market Committee] meeting,” Moya wrote. “If risk appetite remains healthy, bitcoin could grind higher towards $22,500 level.” ​

Latest Prices

● CoinDesk Market Index (CMI): 1,018.43 +2.9%

● Bitcoin (BTC): $20,723 +3.1%

● Ether (ETH): $1,551 +5.8%

● S&P 500 daily close: 3,830.60 −0.7%

● Gold: $1,668 per troy ounce +0.9%

● Ten-year Treasury yield daily close: 4.01% −0.1

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Technical Take

Bitcoin, Ether Price Surge May Not Last: Crypto Markets Analysis

By Glenn Williams Jr

Bitcoin and ether, the two largest cryptocurrencies by market capitalization, recently rose 3.3% and 6.7%, respectively, over the past 24 hours. On Tuesday, BTC crossed $20,000 for the first time since Oct. 5, while ETH topped $1,500 for the first time since the Sept. 15 Merge, the Ethereum blockchain’s technological overhaul. Whether a new longer-range upturn is afoot or BTC and ETH prices are likely to revert to the mean is still unclear.

Technically, both BTC and ETH blew past traditional “overbought” metrics on their hourly charts, and have since retreated. The Relative Strength Index (RSI) shot past 90 for both BTC and ETH on their hourly charts.

As those levels fall well outside the range of normal hourly RSI movement, the RSI may cool, at least from an intraday perspective. Current daily RSI levels for BTC and ETH are both approximately 71.

Read the full technical take by CoinDesk analyst Glenn Williams Jr.

Altcoin Roundup

• Crypto Markets See Largest Short Liquidations in 15 Months; Ether Leads Token Surge: Crypto exchange FTX saw some $500 million in liquidations alone, a larger-than-usual figure. The liquidations may have contributed to a short squeeze because prices of several tokens such as ether (ETH) and dogecoin (DOGE) jumped in the past 24 hours. Read more here.
• Gaming DAO Merit Circle to Burn Nearly $170M Worth of MC Tokens: Merit Circle offers play-to-earn gamers "scholarships" whereby gamers, often in developing countries, borrow a non-fungible token (NFT) that acts as an entrance fee for the game. In exchange, the player has to send back a cut of his in-game earnings. With the move, 200 million of Merit Circle's total supply of 1 billion tokens will be taken out of circulation. Read more here.

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• A16z's Largest Crypto Fund Loses 40% in First Half of 2022, Wall Street Journal Reports:Andreessen Horowitz has slowed down on its crypto investments, making just nine in the third quarter, compared with 26 in the fourth quarter of last year.
• A Majority of US Voters Want More Crypto Regulation, Poll Shows:The results indicate more voters want to see lawmakers treat cryptocurrency as a “serious and valid part of the economy” than as a “mechanism for fraud” and other crimes.

CoinDesk Market Index

Biggest Gainers

Asset Ticker Returns DACS Sector Enzyme MLN +3.81% DeFi Aave AAVE +3.77% DeFi Quant QNT +2.39% Currency

Biggest Losers

Asset Ticker Returns DACS Sector Tribe TRIBE -16.4% DeFi Optimism OP -12.66% Smart Contract Platform Cardano ADA -11.87% Smart Contract Platform

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.