CRYPTO week ahead: August 29 – September 4
Last week in the news
For one more time FED is spoiling the game. After announcements from FED Chair Powell that interest rate hikes are not over, markets reacted in a negative mood. Both EU and US markets were closed in red on Friday, while the crypto market continued with downtrend during the weekend. Bitcoin is ending the week around 20K support line, while Ether fell below 1.5K.
FED Chair Powell delivered a speech at Jackson Hole in Wyoming on Friday, revealing information regarding FED`s view on current macro developments. Major point of his speech was further FED`s commitment to fight inflation, in which sense, more rate hikes are quite probable. Actually his words were “no place to stop or pause '', regardless of the fact that current benchmark rates are around the neutral zone. Although the job market is still strong and inflation is peaking, effects of increased interest rates are already seen on the housing market, and economic output of the country. Economists are starting to express worries that another dip in equities might come in the coming period as an effect of FED's policy.
Venture capitalists are not giving up on the tech world. In an interview with CNBC, Edith Yeung, a general partner at Race Capital, expressed her view that it is good that crypto market lost more than half of its value during this year, because it will drag away people who want short-term profit from it, and actually don't have interest for its long-term development. On the other hand, she is pointing that crypto is actually related to the development of Web3, where the future value stands.
Coinbase crypto exchanger announced that the company will add non ether futures contracts, which would be available for trading on their derivatives platform. Two months ago Conbase introduced nano bitcoin futures. As it has been noted, nano futures represent 1/100 of a coin and allows for their clients less initial capital for trading these derivatives.
As Coindesk is reporting, Binance crypto exchanger and town of Busan in South Korea signed a Memorandum of understanding, which is the basis for business relationship in which Binance will help this city to develop its own blockchain ecosystem. This includes technological, infrastructural and educational support.
Japan will review their current tax law during 2023, under which a heavy tax burden of 55% on gains from tokens might exclude start up companies in this country. This came as a result of efforts from crypto lobby groups, who are voicing support for the crypto industry and especially increasing the number of new companies from the tech industry in Japan.
Crypto market cap
In anticipation of a FED Chair Powell speech at the yearly conference at Jackson Hole in Wyoming on Friday, markets were traded sort of sideways during the week. Friday was the day when FED officials shared important news that monetary tightening is still not over and that further rate increases are on the way. Certainly this is not something that was welcomed by markets, so reaction was imminent and negative. Considering that the crypto market became a part of the mainstream, it also reacted in a negative manner. Total market capitalization has decreased by 57B or 6% on a weekly basis. Unfortunately, this does not mean that market correction might not continue in a week ahead, considering that correction as of the weekend is related mostly to BTC and ETH as leading coins, who lost in total 44B. At the same time, daily trading volumes were modestly decreased to average 109B, compared to the 110B from the week before. Total funds outflow from the beginning of this year has further decreased to the level of 1.243B, which is a total drop of 57%.
Coins that led to a total market capitalization decrease were Bitcoin with a drop of 24B or 6% on a weekly basis and Ether with a decrease of 19B or almost 10%. All other altcoins lost in value, however, this drop was in a range from 3% up to 10%, depending on a coin, which might be seen as a positive move regardless of generally negative market sentiment. Among coins which lost value above 11B were Solana, with a drop in market cap of almost 22B or 15% and Binance Coin, with a drop in the cap of 1.5B or 3%. It is interesting that during the week many altcoins increased the volume of coins in circulation, which helped them to sustain their market cap. Polygon increased coins in circulation by 5.5%, Filecoin continues to gain volumes with last week`s increase by 2.3%, while surprise of the week was certainly LINK which added 4.5% more coins within a single week.
Crypto futures market
Crypto futures continue to trade lower in line with the spot market. BTC futures with shorter maturity were traded down by more than 3%, while ETH futures for the same period were traded lower by more than 8% compared to the end of the previous week.
BTC futures maturing in December this year were down by 10% w/w, where price was holding modestly above 20K. ETH futures for the same period were down by 7%, however, its price dropped below 1.6K.
A drop in spot prices which occurred during the weekend has not been priced in futures of coins, considering that the official market closes on Friday.
For one more time FED is spoiling the game. After announcements from FED Chair Powell that interest rate hikes are not over, markets reacted in a negative mood. Both EU and US markets were closed in red on Friday, while the crypto market continued with downtrend during the weekend. Bitcoin is ending the week around 20K support line, while Ether fell below 1.5K.
FED Chair Powell delivered a speech at Jackson Hole in Wyoming on Friday, revealing information regarding FED`s view on current macro developments. Major point of his speech was further FED`s commitment to fight inflation, in which sense, more rate hikes are quite probable. Actually his words were “no place to stop or pause '', regardless of the fact that current benchmark rates are around the neutral zone. Although the job market is still strong and inflation is peaking, effects of increased interest rates are already seen on the housing market, and economic output of the country. Economists are starting to express worries that another dip in equities might come in the coming period as an effect of FED's policy.
Venture capitalists are not giving up on the tech world. In an interview with CNBC, Edith Yeung, a general partner at Race Capital, expressed her view that it is good that crypto market lost more than half of its value during this year, because it will drag away people who want short-term profit from it, and actually don't have interest for its long-term development. On the other hand, she is pointing that crypto is actually related to the development of Web3, where the future value stands.
Coinbase crypto exchanger announced that the company will add non ether futures contracts, which would be available for trading on their derivatives platform. Two months ago Conbase introduced nano bitcoin futures. As it has been noted, nano futures represent 1/100 of a coin and allows for their clients less initial capital for trading these derivatives.
As Coindesk is reporting, Binance crypto exchanger and town of Busan in South Korea signed a Memorandum of understanding, which is the basis for business relationship in which Binance will help this city to develop its own blockchain ecosystem. This includes technological, infrastructural and educational support.
Japan will review their current tax law during 2023, under which a heavy tax burden of 55% on gains from tokens might exclude start up companies in this country. This came as a result of efforts from crypto lobby groups, who are voicing support for the crypto industry and especially increasing the number of new companies from the tech industry in Japan.
Crypto market cap
In anticipation of a FED Chair Powell speech at the yearly conference at Jackson Hole in Wyoming on Friday, markets were traded sort of sideways during the week. Friday was the day when FED officials shared important news that monetary tightening is still not over and that further rate increases are on the way. Certainly this is not something that was welcomed by markets, so reaction was imminent and negative. Considering that the crypto market became a part of the mainstream, it also reacted in a negative manner. Total market capitalization has decreased by 57B or 6% on a weekly basis. Unfortunately, this does not mean that market correction might not continue in a week ahead, considering that correction as of the weekend is related mostly to BTC and ETH as leading coins, who lost in total 44B. At the same time, daily trading volumes were modestly decreased to average 109B, compared to the 110B from the week before. Total funds outflow from the beginning of this year has further decreased to the level of 1.243B, which is a total drop of 57%.
Coins that led to a total market capitalization decrease were Bitcoin with a drop of 24B or 6% on a weekly basis and Ether with a decrease of 19B or almost 10%. All other altcoins lost in value, however, this drop was in a range from 3% up to 10%, depending on a coin, which might be seen as a positive move regardless of generally negative market sentiment. Among coins which lost value above 11B were Solana, with a drop in market cap of almost 22B or 15% and Binance Coin, with a drop in the cap of 1.5B or 3%. It is interesting that during the week many altcoins increased the volume of coins in circulation, which helped them to sustain their market cap. Polygon increased coins in circulation by 5.5%, Filecoin continues to gain volumes with last week`s increase by 2.3%, while surprise of the week was certainly LINK which added 4.5% more coins within a single week.
Crypto futures market
Crypto futures continue to trade lower in line with the spot market. BTC futures with shorter maturity were traded down by more than 3%, while ETH futures for the same period were traded lower by more than 8% compared to the end of the previous week.
BTC futures maturing in December this year were down by 10% w/w, where price was holding modestly above 20K. ETH futures for the same period were down by 7%, however, its price dropped below 1.6K.
A drop in spot prices which occurred during the weekend has not been priced in futures of coins, considering that the official market closes on Friday.
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