First Mover Americas: BTC and ETH Outperform Traditional Markets in July Despite the Dollar’s Strength

The latest price moves in bitcoin (BTC) and crypto markets in context for July 25, 2022.Read MoreFeedzy

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: Bitcoin trades down slightly on the day but outperforms traditional markets over the month of July (see more on this in Omkar Godbole’s Chart of The Day). Also: FTX is planning to offer early liquidity to customers of bankrupt crypto lender Voyager Digital.

Market Moves: Digital asset investment funds saw inflows totalling $30 million last week, suggesting investor confidence is slowly growing.

Bitcoin (BTC) was trading down slightly on Monday (3%) as stock futures edge upwards ahead of the U.S. Federal Reserve’s monetary-policy meeting this week and earnings reports.

On Wednesday the Fed is expected to deliver another 0.75% point interest-rate increase as it attempts to cool rising inflation. BTC is still trading up 3% on the month, around $22,000.

Ether (ETH), is down 5% over the last 24 hours, trading at $1,540.

“Clearly ETH has outperformed due to EthCC in Paris last week, but I wonder if it has now run out of steam since we tested $1,600,” said Laurent Ksiss, head of Europe at Hashdex.

“A bearish stance is not to be dismissed for the next two weeks as the crypto market is still not out of the woods, but last week’s rally has offered optimism to many retail investors,” he added.

The rest of the crypto market was trading in the red on Monday, with Cosmos’s ATOM down 8%, AVAX down 7% and Cardano’s ADA down 6%.

In other news, crypto trading platform FTX is planning to offer early liquidity to customers of bankrupt crypto lender Voyager Digital. The joint proposal comes two weeks after Voyager filed for Chapter 11 bankruptcy.

Lawyers representing Voyager Digital responded to the proposal by FTX calling it a “low-ball bid dressed up as a white knight rescue” that only benefits FTX.

Over to the United Kingdom, U.K. bank Barclays ($BARC) is among the investors in cryptocurrency custody firm Copper’s $2 billion funding round, according to a report by Sky News.

Additionally, CoinDesk’s chief insights columnist, David Z. Morris, wrote an interesting piece over the weekend on Elon Musk’s influence over the crypto market and whether markets are still fazed by Tesla’s moves.

Biggest Gainers

There are no gainers in CoinDesk 20 today.

Biggest Losers

Crypto funds saw inflows totaling $30 million last week, according to a report from CoinShares. The prior week saw inflows corrected from $12 million to $343 million, marking the largest single week of inflows since November 2021 when BTC and ETH hit record all-time highs.

Weekly crypto asset flows (CoinShares)

BTC saw inflows totalling $19 million last week and ETH witnessed inflows totalling $8 million. The prior week, Ethereum saw inflows totalling $120 million.

“These inflows imply a turning point in sentiment after a recent 11-week run of outflows,” said James Butterfill, head of research at CoinShares in the report.

“It also suggests that as The Merge progresses to completion, investor confidence is slowly recovering,” said Butterfill. The Ethereum network’s Merge is set to take place in September.

This brings month-to-date digital-asset fund inflows to $294 million.

By Omkar Godbole

Macro assets current year returns (Skew)

Bitcoin and ether have outperformed traditional markets by a big margin this month.

The top cryptocurrencies have chalked up double-digit gains despite the dollar strength, deviating from its record of moving in the opposite direction of the greenback. The dollar index or DXY, which gauges the greenback’s strength against major fiat currencies, was up 2.5% for the month at press time. Still, it may be too early to say bitcoin has decoupled from the dollar. The 90-day correlation coefficient between the two stood at -0.65 at press time, indicating a negative or inverse relationship.

The dollar may reassert its dominance if the Federal Reserve downplays the “inflation has peaked” narrative later this week, forcing markets to reprice continued aggressive monetary tightening for the rest of the year.

“Things have to get far more critical before that [Fed pivot] event occurs. This allows room for dollar dominance,” Francis Hunt, founder and director at The Market Sniper, said during an interview with Real Vision.

Ether-Bitcoin Rally Stalls at Trendline From December Peak

Ethereum/Bitcoin (TradingView)

The ether-bitcoin (ETH/BTC) ratio is struggling to penetrate a valid resistance line drawn from December and May peaks.

A break higher may allow smooth sailing toward the May 11 high of 0.076. The daily chart indicators, notably the RSI and the EMA ribbon, have flipped bullish.

Ether picked up a strong bid early this month after Ethereum developers announced Sept, 19 as the tentative date for the completion of the supposedly-bullish and long-awaited transition from the proof-of-work to proof-of-stake consensus mechanism.

Ken Moelis’ Investment Bank Creates Group to Focus on Blockchain Deals, Bloomberg Reports: The New York bank, founded by Ken Moelis in 2007, is looking at crypto deals with more intent.

Memecoin Teddy Doge ‘Soft’ Rug Pulls $4.5M Worth of Tokens, PeckShield Says: Prices of the Dogecoin-inspired token fell some 99.7% in the past 24 hours.

How Attackers Stole Around $1.1M Worth of Tokens From Decentralized Music Project Audius: The sophisticated exploit involved attackers passing a malicious governance proposal by exploiting smart contracts.

Bitcoin Drops Even as Wall Street’s ‘Fear Gauge’ Indicates Calm Ahead of Fed Decision: “I don’t think the hawkish Fed trade has peaked,” one observer said.

Barclays Invests “Millions of Dollars” in Crypto Custody Firm Copper, According to a Report by Sky News: Barclays is expected to invest a sum of “millions of dollars” as part of the raise.

Voyager: ‘No Customer Will Be Made Whole’ Under FTX Proposal: FTX CEO Sam Bankman-Fried said his firm’s offer would give Voyager customers back 100% of the remaining assets, while Voyager’s lawyers argue that it only benefits FTX.

This web version of today’s First Mover newsletter was produced by Sage D. Young.


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