Price Point: Crypto traders might be using centralized exchanges to bet against decentralized finance.
Market Moves: What if the dollar kept its reserve status but still lost value? The well-known Wall Street forex analyst Marc Chandler sees that scenario in the offing. (Upshot: Bitcoin wins.)
Bitcoin Watch: Price-chart patterns show MACD histogram crossing below zero, signaling a bearish momentum shift, CoinDesk's Godbole writes.
What's Hot: FCA crypto derivatives ban, McAfee arrested in Spain, Estonia's digital-currency project, banks' $2T+ of commercial real estate at risk from remote working, Bloomberg analyst sees bitcoin at $100K in 2025.
PRICE POINT
Bitcoin (BTC) was lower, staying in a tight range between roughly $10,500 and $10,800 that has held for nearly two weeks. Ether ( ETH) slipped.
Cryptocurrency analysts were eyeing the recent downdraft in prices for digital tokens associated with the blockchain-industry subsector of decentralized finance, or DeFi. Chainlink's LINK, one of the year's top performers, is down 10% in the past seven days.
Bequant's Denis Vinokourov says traders might be using centralized cryptocurrency exchanges to bet that the DeFi hype might have gone too far.
"The correction in token valuations is likely a by-product of profit taking because a number of tokens have significantly outperformed bitcoin and other large caps," Vinokourov told CoinDesk in an email. "The fact that these tokens are also getting listed across centralized venues and, in some cases, are offered as perpetual/futures contracts, allows market participants to also short the asset."
In traditional markets, European stocks fluctuated and U.S. stock futures pointed to a lower open as traders awaited a speech scheduled for Tuesday morning by Federal Reserve Chair Jerome Powell on the outlook for the economy. Gold was little changed at $1,913 an ounce.
MARKET MOVES
A growing number of economists and analysts — and even the Wall Street firm Goldman Sachs — have speculated this year that the U.S. dollar might be on the cusp of losing its status as the dominant reserve currency for central banks around the world.
That possibility has helped to support this year's 50% increase in prices for bitcoin, seen by many cryptocurrency investors as a hedge against a dollar devaluation.
But CoinDesk's Omkar Godbole reported Tuesday that, according to one prominent foreign-exchange analyst, the dollar's value could decline significantly even if the U.S. currency keeps its majority share of global central-bank reserves for the foreseeable future. As of the most recent data, the percentage is around 60%.
"Backing the dollar is the world's biggest, deepest and the most transparent government bond market," Marc Chandler, chief market strategist at Bannockburn Global Forex and author of the book "Making Sense of the Dollar," told CoinDesk in a video chat on Wednesday. "I just don't know how bitcoin can replace the greenback from that viewpoint."
Marc Chandler, chief market strategist at Bannockburn Global Forex and author of the book "Making Sense of the Dollar," talks with CoinDesk's Omkar Godbole about the future of the U.S. currency. (CoinDesk)
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Bitcoin's price bounce from Friday's low of $10,380 looks to have stalled, and the cryptocurrency remains trapped in a contracting triangle or a narrowing price range.
Such low-volatility price consolidations often end with a violent move on either side.
Some investors may be anticipating a range breakdown, given the weekly chart MACD histogram has crossed below zero – a sign of a bearish shift in momentum.
The indicator, however, is based on backward-looking moving averages and lags prices. As such, its reliability is under question.
Besides, broader sentiment in the options market is bullish, according to three- and six-month put-call skews, which measure the cost of puts relative to calls.
Further, on-chain data shows the market is currently witnessing a bigger influx of new investors than it did at the height of the bull market frenzy in late 2017. That is a major bullish sign, according to popular analyst Willy Woo.
The move to ETH 2.0 will bring the Ethereum network ever closer to fulfilling its original vision: that of a "world computer" that plays host to a parallel, decentralized financial system. Will it be the rocket fuel that takes Ethereum's financial engine mainstream?
CoinDesk's invest: ethereum economy virtual event Oct. 14 will address the ramifications for investors of the sweeping changes underway within the Ethereum ecosystem.
Keynote speakers and panelists including Ethereum founder Vitalik Buterin and Commodity Futures Trading Commission Chairman and CEO Heath P. Tarbert will offer deep dives into Ethereum’s adoption of a proof-of-stake consensus mechanism, sharding and other elements of its impending 2.0 upgrade, as well how the new framework impacts the rapidly advancing business of DeFi, stablecoins and decentralized exchanges.
Ether (ETH): Futures contracts on BitMEX for Ethereum's native token drop by half in wake of U.S. regulators filing charges against Seychelles-based cryptocurrency exchange.
Join CoinDesk Research for the fourth and final episode of How to Value Bitcoin, our live webinar series covering Bitcoin fundamentals.
On Oct. 6, Delphi Digital head of research Yan Liberman will dive into collective profit and loss taking (CPLT), hodlwaves and the ins and outs of the money analysis.
Chart from SEC report illustrating interconnections in U.S. commercial real-estate market (Securities and Exchange Commission)
Universities are often key to getting new industries off the ground, providing the infrastructure to take paradigm-shifting ideas to the next level. But in blockchain and digital finance technology, how do they measure up?
Introducing CoinDesk U, a research-based ranking of the top 20 schools for blockchain education.
During a special CoinDesk Live episode on Oct. 6, we will release the results of the first CoinDesk U ranking. We are inviting students from around the U.S. as well as representatives from student club networks, the crypto industry and leading institutions to discuss traditional academia’s relevance and support for the financial technology poised to fuel Web 3.0.
It seems like every investor has a thesis about how to best play the cryptocurrency opportunity, but who’s right?
CoinDesk has launched The Thesis, a weekly podcast with Senior Markets Reporter Daniel Cawrey that looks at the most important stories and trends for traders and unique interviews with top fund managers digging deeply into their viewpoint - their thesis.
Tune into The Thesis at 9 a.m. ET on the first and third Saturday of each month.Listen to the first episode featuring Jake Brukhman of CoinFund.
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First Mover: Bitcoiners May Not Care if Dollar Keeps Its Reserve Status