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Will the FOMC Provide Relief?

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Bitcoin (BTC) and the broader crypto markets are navigating challenging conditions, historically worsened by September’s seasonality struggles.

In a recent report, Kaiko researchers recently explored how a potential US rate cut and other key economic events could affect Bitcoin. These four charts provided by the analysts explain what to expect from BTC in the coming weeks.

Monthly Change in Bitcoin Price in September

As BeInCrypto reported, the third quarter has historically been challenging for Bitcoin and the broader crypto market, with September often delivering the worst returns. Kaiko highlights that Bitcoin has declined in seven of the last twelve Septembers.

In 2024, this pattern continues, with Bitcoin down 7.5% in August and 6.3% so far in September. As of this writing, Bitcoin is trading over 20% below its recent all-time high of nearly $73,500, recorded more than five months ago.

Read More: How To Buy Bitcoin (BTC) and Everything You Need To Know

Bitcoin Price September Performances Since 2012, Source: Kaiko
Bitcoin Price September Performance Since 2012. Source: Kaiko

However, according to Kaiko Research, upcoming US rate cuts could provide a boost to risk assets like Bitcoin. Bitget Wallet COO Alvin Kan shares this stance.

“At the Jackson Hole meeting, Federal Reserve Chairman Jerome Powell hinted that it might be time for policy adjustments, leading to expectations of future interest rate cuts. The US Dollar Index responded by dropping sharply and is now fluctuating around 100. With a rate cut in September becoming a consensus expectation, the official start of rate cut trading could improve overall market liquidity, providing a boost to crypto assets,” Kan told BeInCrypto.

30-day Historical Volatility

According to the report, September is shaping up to be highly volatile, with Bitcoin’s 30-day historical volatility surging to 70%. This metric measures the fluctuation in an asset’s price over the past 30 days, reflecting how dramatically its price has moved within that period. 

Bitcoin’s current volatility is nearly double last year’s levels and is approaching the peak seen in March, when BTC hit an all-time high of over $73,000.

Bitcoin and Ethereum 30-D Volatility, Source Kaiko
Bitcoin and Ethereum 30D Volatility. Source: Kaiko

Ethereum (ETH) has also experienced heightened volatility, surpassing both March’s levels and Bitcoin’s, driven by ETH-specific events such as Jump Trading’s liquidations and the launch of Ethereum ETFs.

BTC Implied Volatility by Expiry

Since the start of September, Bitcoin’s implied volatility (IV) has risen after dipping in late August. The IV indicator measures market expectations for future price fluctuations based on current options trading activity. Higher IV suggests that traders anticipate larger price swings ahead, though it doesn’t specify the direction of the move.

Notably, short-term options expiries have seen the sharpest increase, with the September 13 expiry jumping from 52% to 61%, surpassing end-of-month contracts. For the layperson, when short-term implied volatility exceeds longer-term measures, it indicates heightened market stress, referred to as an “inverted structure.”

Bitcoin Implied Volatility, Source: Kaiko
Bitcoin Implied Volatility. Source: Kaiko

Risk managers often see an inverted structure as a signal of heightened uncertainty or market stress. As a result, they may interpret this as a warning to de-risk their portfolios by reducing exposure to volatile assets or hedging against potential downside.

“These market expectations align with last week’s US jobs report, which dampened hopes for a 50bps decrease. However, upcoming US CPI data could still sway the odds,” Kaiko researchers note.

Trade Volume

The Bitcoin trade volumes chart also highlights the current market volatility, showing increased trader participation. Cumulative trade volume is nearing a record $3 trillion, up nearly 20% in the first eight months of 2024 after its last peak in 2021.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Bitcoin Trade Volumes, Source: Kaiko
Bitcoin Trade Volums. Source: Kaiko

Traditionally, Bitcoin investors see a rate cut as a positive market catalyst. However, concerns remain about how the market might interpret a larger-than-expected cut. Markus Thielen, founder of 10X Research, cautions that a 50 basis points rate cut could be perceived as a sign of urgency, potentially triggering a retreat from risk assets like Bitcoin.

“While a 50 basis point cut by the Fed might signal deeper concerns to the markets, the Fed’s primary focus will be mitigating economic risks rather than managing market reactions,” Thielen said in a note to clients.

Alongside rate cut speculations, other factors contributing to crypto market fluctuations include the upcoming US elections. As BeInCrypto reported, the Donald Trump versus Kamala Harris debate is expected to trigger movement, particularly in Bitcoin and Ethereum.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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XRP Recovery Stalls—Are Bears Still In Control?

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XRP price started a fresh decline from the $2.20 zone. The price is now consolidating and might face hurdles near the $2.120 level.

  • XRP price started a fresh decline after it failed to clear the $2.20 resistance zone.
  • The price is now trading below $2.150 and the 100-hourly Simple Moving Average.
  • There is a connecting bearish trend line forming with resistance at $2.120 on the hourly chart of the XRP/USD pair (data source from Kraken).
  • The pair might extend losses if it fails to clear the $2.20 resistance zone.

XRP Price Faces Rejection

XRP price failed to continue higher above the $2.20 resistance zone and reacted to the downside, like Bitcoin and Ethereum. The price declined below the $2.150 and $2.120 levels.

The bears were able to push the price below the 50% Fib retracement level of the recovery wave from the $2.023 swing low to the $2.199 high. There is also a connecting bearish trend line forming with resistance at $2.120 on the hourly chart of the XRP/USD pair.

The price is now trading below $2.150 and the 100-hourly Simple Moving Average. However, the bulls are now active near the $2.10 support level. They are protecting the 61.8% Fib retracement level of the recovery wave from the $2.023 swing low to the $2.199 high.

XRP Price

On the upside, the price might face resistance near the $2.120 level and the trend line zone. The first major resistance is near the $2.150 level. The next resistance is $2.20. A clear move above the $2.20 resistance might send the price toward the $2.240 resistance. Any more gains might send the price toward the $2.2650 resistance or even $2.2880 in the near term. The next major hurdle for the bulls might be $2.320.

Another Decline?

If XRP fails to clear the $2.150 resistance zone, it could start another decline. Initial support on the downside is near the $2.10 level. The next major support is near the $2.0650 level.

If there is a downside break and a close below the $2.0650 level, the price might continue to decline toward the $2.020 support. The next major support sits near the $2.00 zone.

Technical Indicators

Hourly MACD – The MACD for XRP/USD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is now below the 50 level.

Major Support Levels – $2.10 and $2.050.

Major Resistance Levels – $2.120 and $2.20.



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Experts Raise Red Flags Over Finances

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Circle’s initial public offering (IPO) filing has raised concerns among industry experts, who are sounding alarms over the company’s financial health, distribution costs, and valuation. 

While the move marks a significant step toward mainstream financial integration, experts’ skepticism casts doubt on the company’s long-term prospects.

Analysts Highlight Red Flags With Circle IPO

On April 1, BeInCrypto reported that Circle had filed for an IPO. The company plans to list its Class A common stock on the New York Stock Exchange (NYSE) under “CRCL.”

Circle’s IPO filing reveals revenue of $1.67 billion in 2024, a notable increase from previous years. However, a closer examination of the company’s financials has uncovered some challenges.

Matthew Sigel, Head of Digital Assets Research at VanEck, noted that revenue increased 16% year over year. Yet, at the same time, the company reported a 29% decrease in EBITDA year over year, indicating a decline in operational profitability. Additionally, net income fell by 42%, reflecting a significant drop in overall profitability.

Circle Financial Data
Circle Financial Data. Source: X/MatthewSigel

Sigel pointed out four factors contributing to the decline in these financial metrics. He explained that the company’s rapid expansion and new service integrations negatively impacted net income. 

Furthermore, the discontinuation of services like Circle Yield reduced other revenue streams. This, in turn, exacerbated the decline in profitability. 

“Costs related to restructuring, legal settlements, and acquisition-related expenses also played a role in the decline in EBITDA and net income, despite overall revenue growth,” Sigel added.

Importantly, he focused on Circle’s increased distribution and transaction costs. Sigel revealed that the cost rose due to higher fees paid to partners like Coinbase and Binance.

A related post by Farside Investors on X (formerly Twitter) shed further light on these expenses.

“In 2024, the company spent over $1 billion on “distribution and transaction costs,” probably much higher than Tether as a % of revenue,” the post read.

This prompts speculation that Circle may be overspending to maintain its market share in the competitive stablecoin sector. The company’s historical performance further fuels skepticism.

Farside Investors added that in 2022, Circle recorded a staggering $720 million loss. Notably, the year was marked by significant turmoil in the crypto industry, including the high-profile collapses of FTX and Three Arrows Capital (3AC). 

This suggests that Circle may be vulnerable to market shocks. Thus, it calls into question the company’s risk management capabilities—especially in the inherently volatile crypto market.

“The gross creation and redemption numbers are a lot higher than we would have thought for USDC. Gross creations in a year are many multiples higher than the outstanding balance,” Farside Investors remarked.

In addition, analyst Omar expressed doubts about Circle’s $5 billion valuation. 

“Nothing to love in the Circle IPO filing and no idea how it prices at $5 billion,” he questioned.

He drew attention to several concerns, including the company’s gross margins being severely impacted by high distribution costs. The analyst also pointed out that the deregulation of the US market is poised to disrupt Circle’s position. 

Additionally, Omar stressed that Circle spends over $250 million annually on compensation and another $140 million on general and administrative costs, raising questions about its financial efficiency. He also noted that interest rates—core income drivers for Circle—will likely decline, presenting additional challenges.

“32x ’24 earnings for a business that just lost its mini-monopoly and facing several headwinds is expensive when growth structurally challenged,” Omar said.

Analysis of Circle's Finances Ahead of IPO
Analysis of Circle’s Valuation Ahead of IPO. Source: X/Omar

Ultimately, the analyst concluded that the IPO filing was a desperate attempt to secure liquidity before facing serious market difficulties.

Meanwhile, Wyatt Lonergan, General Partner at VanEck, shared his predictions for Circle’s IPO, outlining four potential scenarios. In the base case, he forecasted that Circle would capitalize on the stablecoin narrative and secure key partnerships to drive growth. 

In a bear case, Lonergan speculated that poor market conditions might lead to a Coinbase buyout.

“Circle IPOs, the market continues to tank, Circle stock goes with it. Poor business fundamentals cited. Coinbase swoops in to buy at a discount to the IPO price. USDC is all theirs at long last. Coinbase acquires Circle for something close to the IPO price, and they never go public,” Lonergan claimed.

Lastly, he outlined a probable scenario where Ripple bids up Circle’s valuation to a staggering $15 to $20 billion and acquires the company.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Ethereum Price Approaches Resistance—Will It Smash Through?

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Ethereum price started a recovery wave above the $1,850 level. ETH is now consolidating and facing key hurdles near the $1,920 level.

  • Ethereum started a recovery wave above $1,820 and $1,850 levels.
  • The price is trading above $1,860 and the 100-hourly Simple Moving Average.
  • There is a connecting bullish trend line forming with support at $1,860 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair must clear the $1,900 and $1,920 resistance levels to start a decent increase.

Ethereum Price Starts Recovery

Ethereum price managed to stay above the $1,750 support zone and started a recovery wave, like Bitcoin. ETH was able to climb above the $1,820 and $1,850 resistance levels.

The bulls even pushed the price above the $1,880 resistance zone. There was a move above the 50% Fib retracement level of the downward wave from the $2,032 swing high to the $1,767 low. However, the bears are active near the $1,920 zone.

Ethereum price is now trading above $1,850 and the 100-hourly Simple Moving Average. There is also a connecting bullish trend line forming with support at $1,860 on the hourly chart of ETH/USD.

On the upside, the price seems to be facing hurdles near the $1,900 level. The next key resistance is near the $1,920 level and the 61.8% Fib retracement level of the downward wave from the $2,032 swing high to the $1,767 low.

Ethereum Price
Source: ETHUSD on TradingView.com

The first major resistance is near the $1,970 level. A clear move above the $1,970 resistance might send the price toward the $2,020 resistance. An upside break above the $2,020 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $2,050 resistance zone or even $2,120 in the near term.

Another Decline In ETH?

If Ethereum fails to clear the $1,920 resistance, it could start another decline. Initial support on the downside is near the $1,860 level and the trend line. The first major support sits near the $1,845 zone.

A clear move below the $1,845 support might push the price toward the $1,800 support. Any more losses might send the price toward the $1,765 support level in the near term. The next key support sits at $1,710.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is losing momentum in the bullish zone.

Hourly RSIThe RSI for ETH/USD is now above the 50 zone.

Major Support Level – $1,860

Major Resistance Level – $1,920



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