The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. |
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Good morning, and welcome to First Mover. Here's what's happening this morning: - Market Moves: Risk-off drives bitcoin lower. The cryptocurrency's three-day chart shows an impending death cross.
- Chartist's Corner: 'Built to Fail?' Why TerraUSD's growth is giving finance experts nightmares.
And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. - Sergey Vasylchuk, founder and CEO, Everstake
- Maxim Galash, CEO, Coinchange
- Dan Jeffries, managing director, AI Infrastructure Alliance
Today's newsletter was edited by Omkar Godbole and produced by Parikshit Mishra. Let us know what you think by replying to this email. |
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Bitcoin's bear market has plenty of steam left. That's the message from an impending death cross on the lesser-followed three-day chart, where each candle represents 72 hours. The death cross occurs when the 50-candle simple moving average (SMA) crosses below the 200-candle SMA. Aficionados of technical analysis consider the ominously sounding chart pattern a warning of a more profound price drop. And while its predictive powers are constantly questioned, given it is based on backward-looking moving averages, its past record on the three-day chart as a doom indicator is perfect. |
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Bitcoin's stalled bear market resumed with prices falling by more than 40% in the weeks following the confirmation of the death cross on the three-day chart in mid-November 2018. Similar price action was observed following the death cross of mid-December 2014. Notably, bitcoin bottomed out a month later on both occasions. In other words, the post-death cross sell-off marked the final legs of the the-then bear markets. So, if history is a guide, bitcoin could be in for another round of beating before prospects turn bright. Risk-off Bitcoin dropped to $38,300 early Monday as renewed coronavirus outbreak in China threatened to worsen the high inflation-low growth situation facing the global economy. Ether followed suit, dropping to $2,800 at one point, the lowest since mid-March. Bitcoin's implied volatility, or expectations for price turbulence, spiked on aggressive options buying. That was expected, given the implied volatility looked cheap compared to its historical standards and lifetime average. The implied volatility is mean-reverting. Therefore, savvy traders buy options when the IV is cheap and sell when it is expensive. |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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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 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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BCB Group is a leading global provider of business accounts and trading services for the digital asset economy. We provide accounts and payments processing for the pillars of the industry and through our BLINC payments network participants can settle instantly 24/7/365 in any of the currencies supported, with no limits. Our clients can trade FX and cryptocurrencies quickly, at scale, with market-leading value. BCB was built to provide durable financial infrastructure in a volatile environment. |
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'Built to Fail'? Why TerraUSD's Growth Is Giving Finance Experts Nightmares By David Z Morris |
Late on Monday, April 18, the stablecoin terraUSD (UST) edged out Binance's BUSD to become the third-largest stablecoin by market cap. There are now nearly $18 billion UST in circulation. That's well below the nearly $50 billion total for Circle's USDC, or the $82 billion worth of Tether's USDT roaming the Earth. But UST is also much different from those competitors, in ways that could make it incredibly risky. Stablecoins are tokens tracked by a blockchain, but in contrast to assets like bitcoin (BTC), they're intended to consistently match the buying power of a fiat currency, most often the U.S. dollar. Stablecoins were first created to give active crypto traders a tool for moving quickly between more volatile positions, though as we'll see, the potential for big interest rates on loans has also helped attract capital. USDT and USDC are so-called "backed" or collateralized stablecoins. They keep their 1:1 dollar "peg" because they are (ostensibly) backed by bank accounts holding dollars, or by other dollar equivalent assets, for which tokens can be redeemed – although Tether has been notoriously reticent to specify the nature of its reserves. UST, by contrast, began life as what's known as an "algorithmic" stablecoin. These could also be referred to as "decentralized" stablecoins because decentralization is their primary reason for existing. A collateralized stablecoin like USDT or USDC is reliant on banks and traditional markets. That makes them in turn subject to regulation, enforcement and ultimately, censorship of transactions. Circle and Tether are run by centralized corporate entities with the ability to blacklist users and even seize their funds. Both systems have done this, sometimes at government behest. In principle, algorithmic stablecoins like UST don't have this censorship risk because they are not run by centralized corporate structures and do not hold backing in traditional institutions like banks. Of course, in reality "decentralization" is relative, and most such systems today still have key men, such as Do Kwon at Terraform Labs, or affiliated organizations that provide labor and funding. Whatever a system's "decentralized" branding, regulators can still go after such public targets, a risk that's worth keeping in mind. Read The Full Story Here: 'Built to Fail'? Why TerraUSD's Growth Is Giving Finance Experts Nightmares |
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Bitcoin's three-day chart with Ichimoku cloud and MACD histogram. (CoinDesk, TradingView) |
Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price. |
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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. |
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The Bitcoin Death Cross