2024-09-23 10:40

XMR has been locked in a range with $180 as resistance and $100 as a price floor for over two years. XMR has been locked in a range between $180 and $100 for more than two years A breakout could potentially yield a strong rally. Monero (XMR), the leading privacy-focused cryptocurrency, is rising toward a critical level that has repeatedly marked bull failure for over two years. Since June 2022, XMR has been trading sideways, with multiple attempts to break above $180 leading to sharp pullbacks. The downside has been restricted to nearly $100, according to the charting platform TradingView. The cryptocurrency's struggle to maintain bullish momentum beyond $180 suggests traders have been offloading their holdings when it nears that level. With XMR now changing hands near $175, traders should closely watch for a repeat of a bearish reversal lower or a potential breakout. Markets accumulate energy during consolidation phases, which is released in the direction of the eventual bullish breakout or bearish breakdown. The longer the consolidation, the bigger the buildup and eventual release. A sustained move above $180 would shift focus to resistance at $260, which is identified by adding the height ($80) of the two-year trading range to the breakout price of $180. This method of arriving at potential price objectives/resistance levels is known as the measured move/height method, according to technical analysis theory. XMR crashed 35% to $100 in February after Binance, the leading cryptocurrency exchange, delisted the token, saying it didn't meet the exchange's standard. Prices saw a brief rally in June after some European countries cracked down on botnet mining. https://www.coindesk.com/markets/2024/09/23/monero-nears-major-supply-zone-at-180-technical-analysis/

2024-09-23 10:35

From the U.S. dollar to cat-themed cryptos, global assets roar back following the FOMC’s bold move The U.S. Dollar Index climbs above 101, while a weakened yen fuels risk-on momentum. Ether skyrockets 14%, with meme coins leading a 40% surge; bitcoin gains but loses market dominance. Oil jumps 2% amid middle eastern tensions, gold rallies, and Nvidia and S&P 500 ride the risk-on wave. On Sept. 18, the Federal Open Market Committee (FOMC) made a pivotal decision that significantly impacted risk-on assets. The Federal Reserve cut interest rates by 50 basis points, setting a new target range for the federal funds rate at 4.75% to 5.00%. This move sparked debate, with some arguing that the Fed may have been late in the rate-cutting cycle, potentially signaling an impending recession. Historically, the last two times the Federal Reserve started with a 50 basis point rate cut were the 2001 and 2008 recessions, raising concerns that this current cut might signal similar economic challenges. However, others suggest that the Federal Reserve may be navigating a "Goldilocks" period—where the economy grows sustainably. U.S. GDP growth for Q2 was a solid 3% on an annualized basis, and headline inflation has fallen to 2.5%, the lowest level since March 2021, reducing the need for real rates to remain this elevated (the real rate is the difference between the Fed's target rate and the inflation rate). Furthermore, the Atlanta Fed's GDPNow model predicts a Q3 GDP growth estimate of 2.9%, further supporting a balanced economic environment. Impact on key macro assets The development has been the significant rebound in the crypto market. Ether (ETH) surged nearly 14%, highlighting a resurgence of investor risk appetite. Within the cryptocurrency space, cat-themed meme coins have led the charge, emerging as some of the top performers with gains of 40% in just a week. Bitcoin (BTC) also saw a gain of over 5%, although its dominance in the crypto market dipped below 58%, signaling a broad-based rally across other digital assets. Following the FOMC decision, several key macro assets have reacted positively. The U.S. Dollar Index (DXY) rose by 0.36%, pushing the index back above 101, a level widely regarded as vital. Meanwhile, the USD/JPY exchange rate, which had dropped to around 141 just before the Fed's announcement, has since climbed to approximately 143.5. The weakening yen has further bolstered risk-on assets, including cryptocurrencies. Crude oil prices have climbed over 2%, potentially influenced by ongoing geopolitical tensions in the Middle East. Gold, a traditional safe haven, also saw gains. Additionally, Nvidia (NVDA) shares increased by just under 2%, while the S&P 500 index (SPX) rose by over 1%, indicating that risk-on asset classes broadly welcomed the Fed's decision. Crypto ETFs see inflows The buoyancy in the cryptocurrency market was further supported by inflows into both ether and bitcoin ETFs on Sept. 19 and 20. Ether-based ETFs recorded $8.1 million in inflows over these two days, while bitcoin ETFs saw much larger inflows of $250.3 million, according to Farside data. Performance of market capitalization groups When analyzing performance from a broader market perspective, it becomes clear that large, mid, and small-cap coins all faced underperformance in the lead-up to the FOMC decision. However, coming out of the FOMC decision, small-cap cryptocurrencies have emerged as the biggest winners. Despite their early struggles, all three capitalization groups—large, mid, and small caps—have now made relative highs against bitcoin since the Fed's announcement, reflecting a general increase in risk-on sentiment and liquidity across financial markets. Market capitalization groups are typically defined as follows: large-cap stocks have a market capitalization greater than $1 billion, mid-caps fall between $100 million and $1 billion, and small caps range from $50 million to $100 million. Looking ahead, the CME Fed Funds futures are evenly split, with a 50/50 probability of either a 25 or 50 basis point rate cut at the upcoming Nov. 7 FOMC meeting, scheduled just two days after the U.S. presidential election. https://www.coindesk.com/markets/2024/09/23/ether-leads-post-fed-crypto-market-rally-as-yen-weakness-sparks-risk-on-frenzy/

2024-09-23 10:30

The broker started coverage of the bitcoin miner with a buy rating and a $16 price target. Canaccord initiated coverage of Core Scientific with a buy rating. The bitcoin miner is on the cusp of becoming a major player in AI hosting, the report said. The broker noted that Core Scientific has potential upside from its mining business. Core Scientific (CORZ) is on the cusp of becoming a major force in artificial intelligence (AI) hosting, broker Canaccord said in a Monday report initiating coverage of the bitcoin (BTC) miner. Canaccord started coverage of the crypto mining company with a buy rating and a $16 price target. The shares were 1.4% higher at $12.15 in early trading. A transformative 12-year contract the firm inked with hypersaler CoreWeave in June is a game changer, Canaccord said. The broker views it as the "first and landmark 'mega deal' signed by a bitcoin miner to provide high-performance compute (HPC) data center hosting capacity." A hyperscaler is a large-scale data center specializing in delivering huge amounts of computing power. Canaccord identified three positive drivers for the stock: "Ramping revenue in AI hosting, better cash flow and potentially more site acquisitions on the way," analysts led by Joseph Vafi wrote. The price target comprises about $12 for the CoreWeave contract, $3 for the company's remaining power supply that has been selected for AI hosting and around $1 for the bitcoin-mining business. The company also has potential upside from mining. It still has about 230 megawatts (MW) of power that can be used for bitcoin mining, even after repurposing almost 500MW for AI hosting, the report noted. https://www.coindesk.com/markets/2024/09/23/core-scientific-on-cusp-of-becoming-a-major-force-in-ai-hosting-initiated-at-buy-canaccord/

2024-09-23 08:43

Last week, the U.S. Securities and Exchange Commission's (SEC) approved the list of of physically settled options tied to BlackRock's spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT). Options tied to BlackRock's spot bitcoin ETF (IBIT) could set the stage for a GME-like gamma squeeze-led upside volatility in BTC. Amberdata says over the long run, institutions' bias for yield-generating strategies could dampen volatility. One of the exciting developments from last week was the U.S. Securities and Exchange Commission's (SEC) nod for approval and listing of physically settled options tied to BlackRock's spot bitcoin (BTC) ETF, the iShares Bitcoin Trust (IBIT). There is consensus that the IBIT options, which still needs to be greenlighted by the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC), will further help draw institutions to the crypto market. The crypto community, however, seems split on how it would affect the bitcoin market volatility. Per Bitwise Asset Management, gamma squeeze, a rapid price rally catalyzed by options market dynamics, could become a feature of the bitcoin market following the debut of IBIT options. Gamma squeeze To understand the gamma squeeze, readers must know how options work. Options are derivatives that allow the buyer the right to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy and represents a bullish bet on the market, while a put option represents a bearish bet. Options gamma is a metric that gauges how an option's delta, or the sensitivity of an option's price to movements in the underlying asset, changes for every $1 move in the underlying asset's price. When investors buy a lot of call options, anticipating a price rally, market makers, who are mandated to maintain a net market-neutral exposure, end up on the other side of the trade, holding large amounts of short call positions, often called short gamma exposure. As such, they purchase the underlying asset as the market rallies because they are obligated to deliver the underlying asset to the call option buyer. The hedging activity puts upward pressure on the spot price, causing a sharp rally, like the one in shares of American video game retailer GameStop (GME) in 2021. Per Jeff Park, head of alpha strategies and portfolio manager at Bitwise Asset Management, IBIT options, offering regulated leverage on a supply-constrained BTC, will draw solid institutional demand for calls, setting the stage for a gamma squeeze. "Bitcoin options have negative vanna: as spot goes up, so does volatility, meaning delta increases even faster. When dealers [market makers] who are short gamma hedge this (gamma squeeze), bitcoin's case becomes explosively recursive. More upside leads to even more upside as dealers are forced to keep buying at higher prices. A negative vanna gamma squeeze acts like a refueling rocket," Park said on X. Park explained that IBIT options will eliminate the "jump-to-default (JTD) risk" that has kept institutions at bay, allowing bitcoin synthetic notional exposure to grow exponentially. JTD refers to the risk of an issue or counterpart defaulting suddenly before the market can adjust for the increased risk. He expects a strong investor bias for longer-duration out-of-the-money (higher strike) calls once the options go live. "With bitcoin options, investors can now make duration-based portfolio allocation bets, especially for long-term horizons. There's a good chance that owning long-dated OTM calls as premium spend will give investors more bang for their buck than a fully-collateralized position that could drop by 80% over the same period," Park said. During an interview with CoinDesk, Bitwise Asset Management's head of research Europe, André Dragosch, voiced a similar opinion, saying, "The consequence of this would be a price spike similar to what we have seen with GME, which is akin to a "short squeeze" in futures." Dragosch added that the upside volatility from the so-called gamma squeeze could be more pronounced due to the fact that bitcoin's supply is capped at 21 million BTC. The other side of the story Per Greg Magadini, director of derivatives at Amberdata, the gamma squeeze could be seen if a perfect bullish storm, characterized by Republican candidate Donald Trump's victory in the upcoming U.S. elections and Fed rate cuts, grips markets. However, over the long-run, increased institutional participation via the ETF and ETF options is likely to dampen volatility. "Institutional flows, in particular, are counter-cyclical. Portfolio managers tend to trim exposure through quarterly rebalancing, selling appreciating assets when bitcoin rallies too much," Magadini said in the weekly newsletter shared with CoinDesk. Bitcoin's realized or historical volatility has been trending lower since the Chicago Mercantile Exchange listed bitcoin futures in December 2017, opening doors for traditional institutions to take exposure to the cryptocurrency. Besides, institutional flows via IBIT options could temper Bitcoin's upside-implied or expected volatility, according to Magadini. "Another well-known effect of these flows is their impact on implied volatility. Institutions buy protective puts and sell covered calls, which dampens upside implied volatility," Magadini noted. Implied volatility, or investors' expectations for the degree of price turbulence over a specific period, is influenced by demand for options. Upside implied volatility picks up when investors buy calls and vice versa. Sophisticated investors use the covered call strategy to generate additional income on top of their ETF holdings, as observed in the gold market. The strategy involves selling a higher strike ETF call option and pocketing the premium (option's price) while holding a long position in the ETF. The short leg puts downward pressure on the implied volatility. Crypto traders have been setting up covered calls through Deribit's bitcoin options, leading to lower implied volatility over the past few years. "As institutional ownership grows, their behavior has a greater impact. This means that, ultimately, institutional adoption leads to lower volatility in Bitcoin. This is merely a continuation of the clear structural decline in Bitcoin's volatility," Magadini summed up. https://www.coindesk.com/markets/2024/09/23/blackrock-bitcoin-etf-options-to-set-stage-for-gamestop-like-gamma-squeeze-rally-bitwise-predicts/

2024-09-23 07:29

Canada's central bank has said it is shifting its focus to broader payments system research and policy development. Canada has announced it is shifting its focus away from a retail central bank digital currency but implied that it was prepared if the people of the nation decide such a product is needed in the future. CBC News, Canada's public broadcaster, reported that the Bank "is shelving" the idea of a Canadian dollar. Canada is shifting its focus away from a retail central bank digital currency after years of research, its central bank announced last week. "With this work completed, and with other payments issues gaining prominence, the Bank is scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development," a document vaguely titled "Digital Canadian Dollar" said. CBC News, Canada's public broadcaster, reported that "The Bank of Canada confirmed" it has "shifted its focus away from the idea of introducing a digital Canadian dollar." The story also said the Bank "is shelving" the idea of a Canadian dollar. It isn't clear whether the bank's official statement saying it was "scaling down" its retail CBDC work and "shifting its focus to broader payments" research means it has shelved the retail CBDC idea completely. Particularly because the Bank also said it would "continue to monitor global retail CBDC developments and publish some related research," there would "be further opportunities for Canadians to provide input on a potential digital dollar," and that all the research done so far would be "invaluable if, at some point in the future, Canadians ... decide they want or need a digital Canadian dollar." Canada's latest position comes as the debate over CBDC's became a presidential election issue in the U.S. despite the Federal Reserve's Chair, Jerome Powell, saying it was nowhere near recommending – or let alone adopting - a CBDC in any form" and that "people don't need to worry about it." But the Bank of Canada's update does come less than three months after a staff discussion paper which said that cash is "likely to decline" in relevance going forward then a "properly designed CBDC would help fill the gap" and maintain the relevance of a retail public money in the economy." At the end of 2023, the Bank received almost 90,000 responses to a public consultation paper, with most reflecting privacy concerns. Read More: Why We Won’t See CBDCs Everywhere https://www.coindesk.com/policy/2024/09/23/canada-moves-away-from-retail-cbdc-shifts-focus-to-broader-payments/

2024-09-23 06:48

The CoinDesk 20 is beginning the week flat. Monday marked a slow beginning to the Asia trading week with BTC up 1.2% and ETH up 2.6%. Solana memecoin MOTHER, the brainchild of music star Iggy Azalea, is up 4% after having a strong presence at Breakpoint in Singapore. Ether (ETH) pushed past bitcoin (BTC) in daily gains as Token 2049, and Solana's Breakpoint, two of the largest conferences in crypto, wrapped up in Singapore, but both of these tokens are relatively flat as the market stays stagnant. ETH is up 2.6%, trading above $2,600, according to CoinDesk Indices data, while BTC is trading above $63,700, up 1.2%. The CoinDesk 20 (CD20), a measure of the performance of the largest digital assets, is flat, up less than 1%. Data from CoinGlass shows that in the last 12 hours, slightly more short positions than longs have been liquidated, with $64.23 million in short positions and $54.42 million in longs being liquidated. Trading is likely light in the aftermath of last week's 50 basis points (bps) interest rate cut. BTC is up 9.5% in the last week while ETH is up over 16%. Polymarket bettors are confident that another rate cut is coming but are split as to the extent: 47% say it will be 50 bps, while 47% say it will be 25 bps. Solana's (SOL), which was the focus of the Breakpoint conference that took place immediately after Token 2049, is flat, trading above $145. During Breakpoint, many attendees were impressed with the announcements coming from the protocol, such as Jump Crypto's validator going live. Pendle, a portfolio company of Arthur Hayes' fund Maelstrom, is down over 6.5%. Traders are likely spooked that Maelstrom has reduced its position in the project after Hayes spent a considerable amount of time promoting it on stage in Singapore. For his part, Hayes said that they reduced their position in Pendle to get liquidity to fund "a special situation." "Those who monitor our wallets will get a glimpse as to what that is in the very near future," he wrote on X. Pendle is up over 24% on-week according to CoinGecko data. Meanwhile, MOTHER, a memecoin promoted by music star Iggy Azalea is up 4.5% after she announced that the project was building a companion casino called Motherland. MOTHER is one of the few celebrity memecoins that has managed to maintain its value. The token, however, mostly trades on decentralized exchanges (DEX) and is not available on any well-known centralized platforms. An addition of an online casino is sure to complicate the listing process on major centralized exchanges because of regulatory complexities. https://www.coindesk.com/markets/2024/09/23/ether-outperforms-bitcoin-as-token-2049-concludes-overall-crypto-market-stays-flat/