Bitcoin

Key for Crypto Market Trends

Published

2 weeks ago

September 2, 2024

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The cryptocurrency markets are closely watching several key US macroeconomic events this month, which could significantly impact portfolios. Fed interest rates announcements in particular will be a key print in September.

Positive economic data often influences investor sentiment in the crypto space. As traditional markets strengthen, investors become more confident in the overall economy, and vice versa. This could influence risk appetite and, ultimately interest in alternative assets like cryptocurrencies

US Economic Events to Watch in September

Bitcoin (BTC) has slipped further from the $60,000 psychological level, continuing its sluggish performance despite positive catalysts. Factors like growing institutional adoption, a potentially more favorable regulatory environment, and expected Federal Reserve (Fed) rate cuts have done little to boost BTC’s price.

Currently, Bitcoin is over 20% below its recent all-time high of nearly $73,500, recorded more than five months ago. As the new month begins, crypto market participants are closely watching key events, particularly because historical data indicates that September has traditionally been Bitcoin’s worst-performing period.

Bitcoin Monthly Returns. Source: CoinGlass

Non-Farm Payrolls, Unemployment Rates

Investors will keep a close eye on the upcoming US Non-Farm Payrolls (NFP) report, which includes key data on job creation and the unemployment rate. The July report showed weaker-than-expected job growth with 114,000 jobs added, leading to a median forecast of 162,000 for August.

If August’s NFP figures are strong and the unemployment rate declines, it could indicate a robust economy, which might positively influence investor sentiment toward cryptocurrencies. Employment-related reports like these can significantly affect market sentiment, risk appetite, and the overall economic outlook, indirectly impacting Bitcoin and the broader crypto market.

Before the NFP report, the Job Openings and Labor Turnover Survey (JOLTS) data, set to be released on Wednesday, will offer insights into the labor market’s health. A median forecast of 8.1 million job openings in July, slightly down from 8.18 million, could indicate a growing economy, increased consumer spending, and potential wage growth.

Additionally, the ADP National Employment Report, due on Thursday, will provide a snapshot of private sector employment. If July’s ADP report exceeds the previous 122,000 jobs added, it would signal strong job creation and economic growth

Donald Trump Debate Against Kamala Harris

On September 10, the Republican and Democrat presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming key issues in the campaign, this event could trigger volatility in the Bitcoin and broader cryptocurrency markets.

Both parties have shown an interest in crypto, with Harris reportedly warming up to pro-crypto policies.

“They’ve expressed that one of the things that they need are stable rules, rules of the road…focus on cutting needless bureaucracy and unnecessary regulatory red tape… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the road,” Bloomberg reported, citing Brian Nelson, a senior advisor on Vice President Harris’ campaign.

On the Republican side, Trump’s team is working to position the US as the world crypto capital. As both candidates seek to connect with the crypto community, the debate is expected to be intense, especially given Trump’s combative style and Harris’s background as a prosecutor.

US CPI

The US Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. This data measures the rate of inflation by tracking price changes in consumer goods and services. In July, the CPI inflation rate came in at 2.9%, slightly lower than the 3% recorded in June, according to the US Bureau of Labor Statistics (BLS).

The August CPI data will be crucial for determining whether inflation is continuing to slow, as the Federal Reserve targets a 2% inflation rate. If the CPI falls below 2.9%, it would suggest that inflation is moving in the right direction, potentially reducing the pressure on the Fed to maintain high-interest rates.

Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched. Both have previously indicated a possible shift towards looser monetary policy as inflation shows signs of easing and the labor market stabilizes. If their upcoming speeches express confidence that the disinflationary trend is holding steady, it could be bullish for the cryptocurrency market.

Currently, price pressures are easing across the economy, with declines in goods prices, slower increases in housing costs, and more moderate wage growth contributing to a broader reduction in inflation, especially in the services sector. This trend, if sustained, could positively influence investor sentiment, particularly in riskier assets like cryptocurrencies.

US PPI

The day after the CPI data is released, the US Bureau of Labor Statistics will publish the US Producer Price Index (PPI) inflation data. In July, the PPI showed more significant easing than expected, providing relief for both stocks and Bitcoin.

Specifically, the US PPI inflation rate decreased to 2.2% year-on-year (YoY) in July, below the expected 2.3% and down from the previous period’s revised 2.7%. Similarly, Core PPI inflation, which excludes food and energy prices, dropped to 2.4% YoY in July, also below the forecast of 2.7% and significantly lower than the previous 3.0%.

If the August PPI data, set to be released on September 12, shows continued declines in inflationary pressure, it could boost risk appetite among investors, favoring assets like Bitcoin and other cryptocurrencies.

Fed Interest Rate

Another key event this month will be the Federal Reserve’s interest rate decision on September 18. In its previous meeting, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged, with policymakers unanimously voting to maintain the benchmark overnight borrowing rate between 5.25% and 5.50%.

However, during a recent meeting, Fed Chair Jerome Powell expressed increased confidence that inflation is on a sustainable path toward the Fed’s 2% target.

“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell stated.

Fed Target Rate Probabilities, Source: CME Fed Watchtool — Fed Target Rate Probabilities. Source: CME Fed Watchtool

This signals that the Fed may be nearing the end of its rate-hiking cycle, depending on the latest economic data. Markets participants will closely watch the upcoming decision, as it could widely impact financial markets, including cryptocurrencies.

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Bitcoin

Coinbase Dispels Bitcoin IOU and cbBTC Rumors

Published

10 hours ago

September 15, 2024

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Coinbase has addressed recent rumors that it was issuing Bitcoin IOUs to BlackRock for its spot exchange-traded fund (ETF) product.

These rumors emerged as TRON blockchain founder Justin Sun criticized the firm’s wrapped Bitcoin product, cbBTC.

Coinbase Clarifies ETF Operations Amid Bitcoin IOU Rumors

On September 14, crypto analyst Tyler Durden suggested that Coinbase was issuing BTC IOUs to BlackRock. This would mean BlackRock could borrow Bitcoin to short it without proving they held a 1:1 ratio.

Durden referenced Cryptoquant data, asserting that Coinbase was the largest buyer and seller at market highs and lows. He speculated that BlackRock might use its position to negatively influence Bitcoin’s price, either by capping it or causing a major pullback.

BlackRock Bitcoin ETF Flows. Source: SoSoValue

Meanwhile, Tron network founder Justin Sun further had earlier sparked controversies over Coinbase’s new wrapped Bitcoin product, cbBTC. Sun claimed cbBTC lacked Proof of Reserve, had no audits, and could freeze balances at any time. He described cbBTC as “trust me” Bitcoin, implying that a US government subpoena could seize all Bitcoin held through it.

“cbbtc=central bank btc. There is no more ridiculous combination in the world than putting central banks and Bitcoin together. I imagine this is a day Satoshi Nakamoto could never have envisioned when creating Bitcoin,” Sun added.

Coinbase CEO Brian Armstrong responded to these allegations by clarifying how ETFs function and addressing concerns about cbBTC. He explained that ETF mints and burns typically settle on-chain within one business day. He also noted that the firm’s institutional clients use trade financing and OTC options before settling trades on-chain.

Further, Armstrong stated that his firm was not authorized to disclose institutional client addresses, including those of BlackRock.

“If you want audits, Deloitte audits us annually, we’re a public company. I doubt our institutional clients want people dusting all their addresses, and it’s not our place to share for them. This is what it looks like if you want a bunch of institutional money to flow into Bitcoin,” the Coinbase CEO emphasized.

Coinbase's cbBTC — Coinbase’s cbBTC. Source: Dune Analytics

Regarding cbBTC, Armstrong noted that its users trust a centralized custodian to manage the underlying Bitcoin, and Coinbase has never claimed otherwise.

Notably, other market experts have also refuted the IOU claims. Nate Geraci, president of The ETF Store, dismissed the rumors, emphasizing that the ETFs fully own the assets they claim.

“Whatever Coinbase is or isn’t doing, rest assured the ETFs 100% own underlying BTC. It’s real. And it’s spectacular. That simple. Period. End of story. Heard same thing back in the day w/ physical gold ETFs. Anyone perpetuating this stuff doesn’t understand how ETFs work,” Geraci wrote.

Bitcoin ETF Total BTC Holdings. Source: HeyApollo

Meanwhile, Bloomberg analyst Eric Balchunas pointed out that people find it hard to accept that actual market participants, rather than ETFs, are responsible for Bitcoin’s recent price fluctuations.

“I get why these theories exist and people want to scepegoat the ETFs. [Because] it is too unthinkable that the native HODLers could be the sellers. But they are. The call is coming from inside the house. All the ETFs and BlackRock have done is save BTC’s price from the abyss repeatedly,” Balhcunas stated.

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Bitcoin

Bitcoin Mining Shutdown Cause 20% Hike in Electricity Bills

Published

13 hours ago

September 15, 2024

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The closure of a Bitcoin mining operation in Hadsel, Norway, could reportedly lead to an estimated 20% increase in household electricity costs.

According to a report by the Norwegian Broadcasting Corporation (NRK), the Stokmarknes Datasenter Bitcoin mining facility ceased operations after Hadsel’s authorities refused to renew the company’s temporary permit.

Norwegian City Learns The Importance of Bitcoin Mining

The municipality initially granted the permit three years ago, but residents’ complaints about noise from the cooling fans led to its non-renewal. While many locals supported the shutdown, the decision affected Noranett, the area’s electricity provider.

The mining facility accounted for 20% of its revenue. Noranett expects a significant rise in local electricity bills to compensate for the loss.

Robin Jakobsen, Noranett’s network manager, explained that losing a major customer like the mining facility forces price increases. He estimated that other households would see a 20% increase in their bills, amounting to as much as $300 by next month.

Following the news, market experts highlighted the impact of BTC mining on the local economy. Pierre Rochard, Vice President of Research at Riot Platforms, noted that Bitcoin miners often reduce electricity costs by distributing the grid’s fixed costs across a broader base of users.

Bitcoin environmental analyst Daniel Batten echoed this view, arguing that the fee hike is another example of how Bitcoin mining keeps energy costs down.

“Yet another datapoint showing how Bitcoin mining keeps power prices lower for everyday people,” Batten emphasized.

Batten further pointed out that Texas grid operators and peer-reviewed studies support the claim. He criticized politicians for disregarding the benefits of Bitcoin mining, saying it ultimately harms the public.

Norwegian Bitcoin writer Alexander Ellefsen expressed frustration over the government’s lack of support for using Bitcoin mining to tap into the country’s surplus energy. He highlighted that 97% of Norway’s electricity comes from renewable sources, primarily hydropower. During off-peak hours, excess water from Northern hydropower dams often goes to waste due to low demand.

“It’s perplexing to see how some politicians continue to overlook Bitcoin mining as a potential solution. By utilizing this surplus renewable energy, we could support the Bitcoin network while ensuring better energy efficiency and reducing waste,” Ellefsen added.

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Bitcoin Rally Expected Once Price Breaks $69,500 – FOMO Likely?

Published

19 hours ago

September 15, 2024

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Bitcoin is at a pivotal moment after enduring weeks of aggressive corrections and underwhelming price action. Currently testing the crucial psychological level at $60,000, the cryptocurrency faces a critical phase where investor sentiment is shifting from fear to cautious optimism.

This transition comes as many anticipate a potential rally in the coming weeks. Top macro and on-chain analysts, including experts from CryptoQuant, have highlighted that if Bitcoin can break through the significant resistance at $69,500, it may trigger a substantial move toward new highs.

The data suggests that such a breakout could ignite a bullish uptrend, pushing Bitcoin into previously uncharted territory. This critical price point, therefore, could be the key to determining direction in the near term. Investors and market watchers are keenly observing this key level, as it holds the potential to reshape BTC’s future trajectory.

Bitcoin Bull Market: The Path To New ATH

Bitcoin has experienced a notable surge of over 15% since reaching local lows on September 6, leading to a significant shift in investor sentiment. This upward movement has sparked renewed discussions among analysts and traders about the potential for a bull run.

The growing optimism is fueled by insights from prominent on-chain analyst Axel Adler from CryptoQuant. Adler recently shared revealing data on X, indicating that BTC’s bull rally could commence once the price surpasses $69,500. According to Adler, this key level will likely trigger a surge of Fear of Missing Out (FOMO) in the market as previous profit-takers rush back into BTC, driven by the fear of missing out on potential gains.

Bitcoin Annual Quintile Trends Chart Reveals $69.5K turning point. — BTC Annual Quintile Trends Chart Reveals $69.5K turning point. | Source: Axel Adler CryptoQuant chart on X

Adler’s analysis highlights the BTC Annual Quantile Trends chart, a valuable tool for identifying bullish phases in the Bitcoin market. This chart suggests that breaking through the $69,500 threshold, which lies above the 75% quintile, will be crucial for initiating the next bullish phase. Historically, when Bitcoin begins a rally, it tends to be rapid and volatile, often causing a shakeout among skeptical investors.

If Bitcoin successfully breaches the $69,500 level, as crypto enthusiasts anticipate, it could signal the start of a significant bull run. The market’s response to this potential breakout will likely set the stage for Bitcoin’s price trajectory and overall market sentiment in the near term.

BTC Technical Levels

Bitcoin is trading at $60,252 after a streak of positive sentiment and rising price action. The recent surge has pushed BTC above the critical 4-hour 200 exponential moving average (EMA) at $58,800, a level that had acted as resistance since early August.

BTC trading above the 4H 200 EMA. | Source: BTCUSDT chart on TradingView

Holding above $60,000, Bitcoin now flirts with higher prices, suggesting the market may be positioning itself for substantial gains in the coming months. This shift in momentum could be the beginning of a stronger uptrend if Bitcoin continues to consolidate above $60,000.

However, if BTC fails to maintain support at this level and drops below the 4H 200 EMA, a deeper correction is likely. The next significant support level would be around $55,500, where demand could stabilize the price or potentially lower if selling pressure intensifies. The upcoming days will be pivotal in determining whether BTC will continue its upward trajectory or face a temporary pullback as traders watch for key levels to hold or break.

Featured image from Dall-E, chart from TradingView

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