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Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.
In today’s newsletter:
Price Point: BTC is down 5% on the day and one trader predicts the world's largest cryptocurrency could hit lows of $15,000 in August due to a worsening macro environment.
Market Moves: Stablecoin Tether has found stability for the first time in over two months. One trader said while tether has passed the market's stress test with a return to normalcy - concerns about its reserves will linger.
Chart of The Day: Ether's options market has turned cautious, Omkar Godbole writes.
Price Point
Bitcoin (BTC) was trading down 5% on Tuesday morning as global markets dropped. U.S. stock futures slipped while investors analyzed recent earning reports and awaited results from technology companies.
Microsoft and Google will post quarterly earnings after the U.S. market close on Tuesday. Amazon and Apple will update theirs on Thursday. The Federal Reserve is also set to announce another interest rate hike on Wednesday.
Crypto Finance AG’s Head of Trading Mike Schwitalla said in a note Tuesday morning that the Fed’s decision will be more of a non-event.
“Due to the good forward guidance of the Fed in recent weeks, I think the market is adequately positioned, and it will be more of a non-event,” said Schwitalla.
BTC might see levels as low as $15,000 in August due to the worsening macro environment, Schwitalla said.
“We can see the medium-term downtrend, which has been in place since April.”
The horizontal lines in the chart are supports and resistances. (TradingView via Crypto AG)
“The big question now is whether or not the market can break through this trendline. In case of a breakout, prices of $29,000 are possible in the short-term,” said Schwitalla.
Ether (ETH), the second largest cryptocurrency by market value, was down 8.8% at around $1,400. All other altcoins were trading in the red on Tuesday, with NEAR Protocol taking the largest hit, down 11.5%.
In other news, the U.S. Securities and Exchange Commission (SEC) is reportedly probing crypto exchange Coinbase, a publicly-traded company it oversees, on suspicion it allowed U.S. persons to trade unregistered securities.
Meanwhile, some U.S. senators are trying to free Americans from tracking taxes every time cryptocurrencies change hands, introducing a bill that would exempt them from reporting any trade in which they earn less than $50.
Hong Kong-based crypto exchange OSL Digital Securities is set to distribute security tokens to professional investors in a private security token offering (STO). The Ethereum-developed tokens distributed represented a US$10,000 worth of a coupon-rate USD bond linked to the performance of bitcoin.
Also, Binance’s CEO Changpeng Zhao has sued Bloomberg Businessweek’s publisher Modern Media on defamation claims over a translated Chinese language article title that portrayed the crypto exchange chief as running a “ponzi scheme."
Biggest Gainers
Biggest Losers
| Asset | Ticker | Returns | DACS Sector | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Polygon | MATIC | −10.5% | Smart Contract Platform | Ethereum | ETH | −9.7% | Smart Contract Platform | Terra | LUNA | −9.6% | Smart Contract Platform |
Market Moves
By Omkar Godbole
Tether (USDT), a stablecoin meant to be worth a dollar, has found stability for the first time in over two months.
The world's largest stablecoin by market value regained its dollar peg on July 20 and has remained steady since then, the first such instance since the collapse of Terra's algorithmic stablecoin TerraUSD or UST (now TerraClassicUSD) in the second week of May.
Terra's UST, the-then third largest stablecoin in the world, tanked on May 12, spurring panic selling in other dollar-pegged cryptocurrencies. Tether's peg broke and fell as low as $0.92 on some exchanges following UST's crash and averaged about $0.99 in June.
Tether's market capitalization has declined by $16 billion to $65 billion in two months, a sign of large redemptions by holders. This means that the company behind USDT, Tether Ltd, honored billions of dollars worth of redemptions following UST's meltdown. Tether Ltd has long been criticized for the lack of transparency about the nature of assets backing the stablecoin.
In other words, tether has passed the market's stress test, withstanding redemptions in volatile conditions and eventually reclaiming the peg. "The past two months have definitely been a stress test for stablecoins following the collapse of UST and sharp contraction in USDT's market cap," Clara Medalie, research director at Kaiko, said. "Tether proved it's ability to process billions in redemptions, despite lingering questions over the makeup of its reserves."
It remains to be seen if tether's recent resilience bolsters investor confidence in the stablecoin, and trader and analyst Alex Kruger is still skeptical about the stablecoin's resilience. Tether is heavily used in the bitcoin (BTC) market and decentralized finance (DeFi).
Read the full story here: Tether Finds Stable Dollar Peg After Terra's Collaps
Chart of the Day
By Omkar Godbole
Ether's options market has turned cautious ahead of expected Federal Reserve rate increase on Wednesday.
The put-call skews have turned positive, indicating renewed demand for puts or options offering protection against price drops.
Traders appear worried that macroeconomic factors may overpower the merge optimism, yielding a fresh decline in ether.
The put-call skews fell below zero last week, indicating a bullish bias as updated deadline for the ETH Merge saw investors pile into call options.
Latest Headlines
'Cryptojacking' in Financial Sector Has Risen 269% This Year, SonicWall Says: Cyberattacks targeting the finance industry are now five times higher than attacks on retail.
Crypto Exchange OSL Will Sell Security Tokens to Professional Investors: The Ethereum-developed tokens distributed represented a $10,000 worth of a coupon-rate USD bond, which is linked to the performance of bitcoin.
Tether Finds Stable Dollar Peg After Terra's Collapse: While tether has passed the market's stress test with a return to normalcy, concerns about its reserves will linger, one trader said
Institutional Traders Have Mixed Views About Tesla’s Decision to Sell Bitcoin: “Macro and micro factors are complex, and cash on hand is welcome,” a trader interviewed by CoinDesk said.
US Senators Push Bill to Make Small Crypto Transactions Tax-Free: The top Republican on the Senate Banking Committee joined Democrat Kyrsten Sinema in legislation to exempt transactions of less than $50.
SEC Probing Coinbase for Allegedly Listing Securities, Bloomberg Reports: The investigation predates last week’s insider trading lawsuit, according to the report.
This web version of today's First Mover newsletter was produced by Sage D. Young.