The crypto market extended its downward trend for the fourth consecutive day on Thursday, coinciding with a slightly higher-than-anticipated inflation report. Ether (ETH) notably dropped to a seven-month low, touching $1,523, its weakest price since March. It has since recovered to $1,531, although it remains down 1.9% over the last 24 hours, underperforming the broader crypto market. In contrast, Bitcoin experienced a more modest decline, trading at $26,600, outperforming the majority of the other digital assets in the market. On Thursday, Solana (SOL) and Avalanche’s native token (AVAX) saw declines of 2% to 3%. Notably, tokens associated with the decentralized finance (DeFi) sector experienced the most significant losses in the digital asset market. This decline is attributed to ongoing sluggish DeFi activity in the crypto space.
Bitcoin
Following its inability to breach the $28,000 resistance on October 8, Bitcoin experienced a 4.9% correction over the subsequent four days. Market sentiment appears to be dominated by fear, as indicated by derivatives metrics. Nevertheless, when viewed in a broader context, Bitcoin’s performance is quite resilient, especially when compared to gold, which has declined by 5% since June, and Treasury Inflation-Protected (TIP) bonds, which have experienced a 4.2% drop during the same period. The most recent CPI report is notable for showing that inflation is 0.2% lower than the previous month, especially when compared to the August 2023 report which indicated a 0.4% increase in inflation. This is likely to elicit a more positive response from Bitcoin investors than the previous month. If these economic projections align with historical trends, there’s a possibility that the price of Bitcoin (BTC) could retest $30,000 in the coming weeks. However, it’s important to keep a close watch on the escalating tensions in the Middle East, as this remains a significant factor that could influence the Crypto market. By merely maintaining its position at $27,700, Bitcoin has outperformed two of the most secure assets in traditional finance. BTC has been trading in a broad range from $25,000 to $28,500 over the past two months with low volumes. Breakouts on either side of the range will further decide the trend for the asset
Ethereum
Ethereum exhibited robust bullish momentum initially, bouncing back after finding support around the $1,500 range. However, as it approached the 100-day moving average at approximately $1,700, Ethereum encountered resistance, triggering a significant downward trend. This downtrend retraced back to the previously broken 100-day moving average, signifying a strongly bearish trajectory for Ethereum’s (ETH) price. It is trading sideways in a range from $1,525 to $1,750 over the past two months. $1,525 to $,1500 is a strong support zone for the asset. If it breaks and closes below this then we may expect some more correction. The congestion in Ethereum’s queue for new validators on the blockchain has significantly diminished. This marks the first time this has occurred since the major “Shapella” upgrade in April, which signalled the completion of Ethereum’s transition to a fully operational proof-of-stake network. Recent blockchain data indicates that the number of validators waiting to join the network has dwindled to just 598, a substantial reduction from the peak of over 96,000 in early June.
Macro News
On the macro front, In traditional financial markets, U.S. stocks experienced a break in their recent four-day winning streak. Both the S&P 500 and Nasdaq declined by 0.6%, while bond yields saw a notable increase. This decline in stock prices and the rise in bond yields came in response to the U.S. Consumer Price Index (CPI) data, a significant gauge of inflation, which indicated a 0.4% increase in September, surpassing the 0.3% expectation from analysts.
Concurrently, the U.S. Dollar Index (DXY) posted a gain of 0.8%, which added to the downward pressure on riskier assets such as equities and crypto assets. It’s worth noting that the U.S. Dollar Index, measuring the dollar against a basket of foreign currencies, including the euro, Swiss franc, and British pound, is approaching its highest level in 10 months. This suggests a substantial vote of confidence in the relative resilience of the U.S. economy.
Weekly Snapshot:
| USD ($) | 05 Oct 23 | 12 Oct 23 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $27,416 | $26,757 | -2.40% | $28,494 | $26,722 | $28,253 | $26,558 |
| ETH | $1,611 | $1,540 | -4.41% | $1,751 | $1,610 | $1,660 | $1,523 |
| BNB | $210.68 | $205.23 | -2.59% | $221.19 | $210.47 | $214.39 | $203.66 |
| Crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -8.14% |
| Ethereum (ETH) | -10.43% |
| Binance Coin (BNB) | -8.76% |
| Resistance 2 | $32,500 | $2,150 | $0.95 | $255 |
|---|---|---|---|---|
| Resistance 1 | $28,500 | $1,750 | $0.75 | $220 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $25,000 | $1,500 | $0.50 | $200 |
| Support 2 | $22,500 | $1,350 | $0.41 | $180 |
Market Updates:
- A 75-minute secretly recorded audio clip of Caroline Ellison has revealed the exact moment 15 former Alameda Research staff found out the hedge fund was “borrowing” user funds from FTX.
- The USDR stablecoin depegged on Oct. 11th after users requested over 10 million stablecoins in redemptions. Despite being 100% backed, the majority of its assets were illiquid, tokenized real estate properties.
- Mastercard has completed a trial involving wrapping central bank digital currencies (CBDCs) on different blockchains, similar to wrapped Bitcoin (wBTC) and wrapped Ether (wETH).
