First Mover Asia: Bitcoin Regains $27K Amid Encouraging Macro, Technical Signs

Good morning. Here’s what’s happening:

Prices: Bitcoin was trading over $27K to recover some lost ground from its plunge last week.

Insights: The stablecoin supply ratio drop of the past 11 days suggests a potential increase in buying power for stablecoins.

Prices

CoinDesk Market Index (CMI) 1,158 +8.4 ▲ 0.7% Bitcoin (BTC) $27,165 +433.8 ▲ 1.6% Ethereum (ETH) $1,820 +23.6 ▲ 1.3% S&P 500 4,124.08 −6.5 ▼ 0.2% Gold $2,020 +5.4 ▲ 0.3% Nikkei 225 29,388.30 +261.6 ▲ 0.9% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)CoinDesk Market Index (CMI) 1,158 +8.4 ▲ 0.7% Bitcoin (BTC) $27,165 +433.8 ▲ 1.6% Ethereum (ETH) $1,820 +23.6 ▲ 1.3% S&P 500 4,124.08 −6.5 ▼ 0.2% Gold $2,020 +5.4 ▲ 0.3% Nikkei 225 29,388.30 +261.6 ▲ 0.9% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Hopeful Signs for BTC at $27K

After seven days of plunging prices, bitcoin steadied.

The largest cryptocurrency by market capitalization was recently trading at about $27,165, up 1.1% over the past 24 hours and a little above where it stood when the weekend began. BTC remains down more than 10% since May 5 when it started its most recent swoon, the result of profit-taking and low liquidity against a backdrop of industry-focused and macroeconomic uncertainties.

"Financial markets in general (are) driven by risk, by liquidity, and so, not surprising right now, when people are fearing risk assets as a whole, we're seeing large swaths of selling," Ryan Rasmussen, an analyst for crypto fund manager Bitwise, told CoinDesk TV's "First Mover" program on Friday.

"When there's less liquidity, you're going to have larger swings in price whenever an asset (is) sold." But he added: "There will be more liquidity come into crypto."

Ether, the second largest crypto in market value, was changing hands near $1,800, down a few fractions of a percentage point and about the same level as early Saturday. Other major cryptos moved into green territory as the Asia trading week began with Litecoin recently up more than 5.7%. The CoinDesk Market Index, a measure of the crypto market's performance, was up 0.8%.

Leading Asia indexes were mixed with the Nikkei up about 0.5% but the Hang Seng down 0.2%. Rasmussen noted the declining correlation between crypto and traditional asset markets, which were mixed last week with the tech heavy Nasdaq Composite up slightly over the most recent five days but the S&P 500 and Dow Jones Industrial Average (DJIA) falling 0.2% and 1.1%, respectively.

"Any kind of mistrust in traditional financial systems plays into the hands of crypto," Rasmussen said, adding: "I'm happy to see the correlation fall between traditional risk assets, traditional equities and crypto."

In an email to CoinDesk, Joe DiPasquale, the CEO of crypto fund manager BitBull Capital, noted that the current "macroeconomic situation around the world is creating a conducive environment for crypto assets to thrive."

This week, DiPasquale is looking for bitcoin's price to hold steady in a range between $25,000 and $27,000 "before bouncing toward $30K again."

"We don’t think the market needs a catalyst in the immediate term," he wrote. "It is only a matter of time before we see another major rally."

Biggest Gainers

Asset Ticker Returns DACS Sector Gala GALA +5.3% Entertainment Terra LUNA +3.7% Smart Contract Platform Cardano ADA +2.4% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector Cosmos ATOM −0.5% Smart Contract Platform

Insights

What Does the Recent Stablecoin Supply Ratio Mean for Bitcoin?

The Stablecoin Supply Ratio (SSR) has declined approximately 11% over the most recent 11 days, indicating a potential increase in buying pressure for bitcoin.

The metric, which measures the ratio of bitcoin’s market capitalization to the market cap of stablecoins, gives insight into the supply-and-demand dynamics between stablecoins (used as a vehicle to purchase cryptocurrencies) and BTC itself.

A higher SSR indicates that buying power is weakening, while lower values indicate that buying power is increasing.

The recent SSR drop follows a 52% increase between March and May 5. The pivot indicates that additional cash or liquid reserves have entered the market, and could lead to higher BTC prices.

Important events.

3:00 p.m. HKT/SGT(7:00 UTC) Eurogroup Meeting

4:30 p.m. HKT/SGT(8:30 UTC) Bank of England Monetary Policy Report Hearings

5:00 p.m. HKT/SGT(9:00 UTC) Eurozone Industrial Production s.a. (MoM/March)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Bitcoin Touches 2-Month Low; Do Kwon Set To Be Released From Montenegro Jail

Bitcoin (BTC) continued to lose ground in the wake of CoinDesk's Bitcoin Trend Indicator, shedding the bullish bias for the first time in three weeks. Bitwise crypto analyst Ryan Rasmussen shared his markets analysis. Separately, Terraform Labs founder Do Kwon was set to be released from Montenegro jail on supervised bail as his trial on document forgery charges continues. Plus, Chia Network CEO and President Gene Hoffman discussed the blockchain and smart-contract platform's plans to go public. Wormhole Foundation head of operations Dan Reecer also joined the conversation.

Headlines

Binance Announces Exit from Canada, Citing Regulatory Tensions: The world’s largest crypto exchange by volume said new guidance related to stablecoins and investor limits prompted the exit.

Ethereum Resumes Finalizing Blocks after Second Performance Hiccup in 24 Hours: When blocks are not being finalized, it is possible that pending transactions might be re-ordered or dropped from the network. Developers haven't determined the source of the hold-ups, but they are urging for calm amidst the concern and uncertainty.

Among Bitcoin Developers, Debate Is Raging Over Whether to Censor Ordinals BRC-20s: Despite calls for censorship, many developers agree that maintaining the status quo is the right thing to do for now.

MakerDAO Founder Proposes Plan for Upgraded Versions of DAI Stablecoin, Governance Token: Rune Christensen also proposed to incorporate artificial intelligence-assisted processes into Maker’s governance.

House Democrats Consider New Stablecoin Bill Proposal, Source: The proposal comes weeks after Republicans introduced their own discussion draft of a new bill.