First Mover: Bitcoin Drops, Stocks Rally Ahead of Biden’s Budget Announcement

PLUS: Bitcoin Remains in Corrective Phase Below $40K; Further Downside Expected

Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets May 28, 2021 Sponsored by     Bitcoin (BTC) -8.5%  $35,991 Ether (ETH)  -10.2%   $2,501 (Price data as of May 28 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning. Here's what we're writing about: Market Moves: Bitcoin Drops, Stocks Rally Ahead of Biden's Budget Announcement   Technician's Take: Bitcoin Remains in Corrective Phase Below $40K; Further Downside Expected Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker at 9:00 a.m. U.S. Eastern time. Today the show will feature guests: Denelle Dixon, Stellar Development Foundation CEO & Executive Director  Nichola Pelecanos, NEM Group Head of Trading Sen. Carol Blood, Nebraska State Senate Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Gainers: None of the assets in the CoinDesk 20 is up today. Losers:  Chainlink (LINK): -17.2% The Graph (GRT): -15.5% Aave (AAVE): -13.5%   The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. Market Moves by Omkar Godbole Bitcoin Drops, Stocks Rally Ahead of Biden's Budget Announcement Bitcoin is nursing losses on Friday despite hopes of more inflation-boosting U.S. stimulus to come. On Friday, President Joe Biden is set to release his first full budget, seeking $6 trillion in federal spending for the fiscal year 2022 and $8.2 trillion by 2021, The New York Times reports.   The proposal shows the Biden administration remains undeterred by recent inflation fears and is unlikely to close the liquidity tap anytime soon, having already pumped trillions of dollars into the system to counter the economic effects of the coronavirus pandemic since March 2020.   That's potentially a bullish development for bitcoin, which is widely touted as digital gold. However, the leading cryptocurrency is changing hands near $35,800 at press time, representing a 7% drop on the day. The decline comes a day after buyers failed to establish a foothold above the $40,000 mark.   However, the prospect of more liquidity is pushing stocks higher. The pan-European Stoxx 600 index is trading 0.43% higher at new record highs above 445 points, according to Investing.com. Futures tied to the S&P 500 are also hinting at a positive start to trading on Friday with a 0.5% gain. Bitcoin prices, May 27 - 28, 2021 (CoinDesk) Fears that the Federal Reserve may raise the interest rate to counter inflation could be keeping the cryptocurrency under pressure. That's because rate hikes dilute the appeal of the store-of-value assets like bitcoin.   According to Bloomberg, rates traders have boosted bets that the Fed will raise borrowing costs next year, much earlier than policymakers have indicated.   The rate hike fears may amplify, if the core personal consumption expenditure (core PCE) – the Fed's preferred measure of inflation – blows past expectations. That could lead to a deeper drop in bitcoin. The April data is scheduled for release at 12:30 UTC today.   However, analysts expect the cryptocurrency to see range play in the short term. "From a technical point of view, BTC is in a consolidation phase. We expect that there will be choppy trade between $30,000–40,000 for the next two weeks," Matthew Dibb, co-founder and COO of Stack Funds, said.   Read the original story here: Bitcoin Drops, Stocks Rally Ahead of Biden's Budget Announcement A message from Nexo Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring:    * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo. Get started at nexo.io Technician's Take by Damanick Dantes Bitcoin Remains in Corrective Phase Below $40K; Further Downside Expected Bitcoin (BTC) failed to sustain moves above $40,000 resistance on Thursday as the broader uptrend weakens. The cryptocurrency was trading around $36,000 at the time of writing and upside appears limited into the weekend.   A bearish trend reversal is on watch after months of slowing momentum, consolidation, and a downside break below $50,000 and $40,000. Bitcoin is down about 37% month-to-date and has experienced a series of sharp drawdowns similar to 2017 which preceded a bear market.   Daily bitcoin chart shows support resistance levels with oversold RSI (Source: TradingView) The relative strength index (RSI) on the daily chart has been oversold over the past week as price held support around $30,000. However, the RSI is not yet oversold on the weekly chart which suggests price upside should remain limited around $40,000. Bitcoin is below the 100-day and 200-day moving averages. This indicates the corrective phase that began earlier this month remains in effect. On intraday charts, bitcoin failed to hold support. Further downside towards $33,000 could encourage short-term buyers and stabilize the current decline. Despite signs of a broader trend reversal, there are still short-term opportunities for active traders. "BTC can be very volatile, especially compared to assets in traditional markets," wrote Justin Chuh, senior trader at Wave Financial in an email to CoinDesk.   "No one is borrowing to short spot BTC, we sill have an upward sloping forward curve, and downside protection remains relatively light," said Chuh, who added that support will need to hold above $30,000, or otherwise bitcoin would be down on the year.   Read the original story here: Bitcoin Remains in Corrective Phase Below $40K; Further Downside Expected A message from ErisX ErisX's customers trade crypto without sacrificing security, transparency or the benefit of market oversight. Choose from our Trading UI, Websocket API, or our Algo Machine ™ to automate your trading strategies without having to write code. Algo features include "pegged order" and "order-on-fill". Reduce your trading costs with industry-low trading fees and instant rebates for passive order flow. Sign up for our weekly newsletter. Less Fees. More Bitcoin. BOLO Be on the look out for some of these upcoming events: 12:30 UTC (8:30 a.m. ET): Core inflation (April). Est: 0.6% Consumer spending. Est: 0.5% Personal income. Est: -14% Consumer sentiment (May). Est: 83.0 ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:   FinCEN's Mosier on Unhosted Wallet Rule, Elliptic on Cracking the Colonial Pipeline Case, Kraken's Dan Held on Plans to Go Public and More "First Mover's" special expanded edition covering today's hot topics and news from Consensus by CoinDesk 2021 on the final day of the conference. Today's guests include Josh Swihart of Electric Coin Company on privacy coins, Dr. Tom Robinson of Elliptic discussing the Colonial Pipeline case and Dan Held of Kraken.   Inflation Discussion, Markets Update, Crypto COVID-19 Relief for India, Tom Brady Joins Consensus 2021 "First Mover" takes a first look at Day 4 of Consensus by CoinDesk 2021 and dives into the news and big themes at this year's conference, not the least of which is inflation. Hear what former U.S. Treasury Secretary Larry Summers had to say. Today's guests include Sandeep Nailwal of Polygon, one of Mark Cuban's new investments. Nailwal is also leading COVID-19 relief efforts in India. Marc Chandler of Bannockburn Global Forex joins our markets discussion and Mariana Gomez de la Villa of ING on its study of decentralized finance (DEFI) and the future of banking. Latest Headlines   No One Can Shut Down Bitcoin, Says Binance CEO CZ Regulatory scrutiny around Binance is likely due to a lack of clarity from governments, CZ said.   The Node: Regulating Intermediaries in a DeFi World Leading DeFi lawyers ask: Why apply rules designed for centralized finance to a world where intermediaries are code?   Ark's Cathie Wood Blames Crypto Crash on 'ESG Movement' "A lot of institutional buying went on pause" due to concerns about mining's environmental impact, the influential fund manager said at Consensus 2021.   NFL Legend Tom Brady Has 'Definitely' Invested in Crypto The seven-time Super Bowl champion says he doesn't see crypto going away. As for which coins he owns, the seven-time Super Bowl champion didn't say.   Liquidity Mining Will Return to Uniswap 'Very Soon,' Founder Says "We're kind of seeing the community build this out," Hayden Adams said at Consensus 2021.   State of Crypto: What Regulators Said at Consensus 2021 Regulators are getting more involved in crypto, or so they said at this year's Consensus event.   Australian Tax Office Warns Investors to Report Crypto Gains and Losses The ATO will inform around 100,000 crypto investors to review their previous years' returns and ensure they're correct.   DocuSign to Acquire 'Smart Agreement' Firm Clause DocuSign will use Clause's technology in its Agreement Cloud platform.   BurgerSwap Hit by Flash Loan Attack Netting Over $7M The attacks marks yet another exploit of a BSC-enabled DeFi protocol.   Massachusetts Judge Rules Robinhood Cannot Block Regulator's Case Robinhood was trying to stop an enforcement action alleging that the platform encourages inexperienced users to make risky trades without safeguarding limits. Fed Research Finds Private Digital Currencies Can Be 'Attractive Cash Alternative' for Firms The Richmond Fed looks at if and when it may be beneficial for firms to issue a digital currency in a new brief.   Sweden's Central Bank to Test Digital Currency With Handelsbanken The Riksbank will partner with Handelsbanken to test how the e-krona might work in the real world.     Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.  ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. First Mover   A newsletter from CoinDesk Copyright © 2021 CoinDesk, All rights reserved.    250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.