MARKETS week ahead: August 21 – 27
Last week in the news
China is evidently slowing down, while Fed's meeting minutes revealed the possibility for interest rates to move even higher from currently expected levels. Negative sentiment continues to prevail on financial markets. Both EU and US equities continued their negative trend for the third week in a row, while US Treasuries continue to rise. Bitcoin had the worst week since May this year, followed by other crypto coins. Markets are clearly revisiting their optimism from the beginning of this year.
China's housing market is passing through difficult times. During the previous week markets were hit by a series of negative news related to some Chinese big players within this industry. One of the largest real estate companies, Country Garden, defaulted on its bond payments on Monday. On the other side, by far the largest real estate company in China, Evergrande, registered in the US, filed for protection under the bankruptcy law in the US. The company was previously in trouble, trying to save the business through restructuring, but it failed to find supporting funds for that mission. Further destiny of the company is currently unknown.
Another important event which made an impact on market sentiment was a release of FOMC meeting minutes from its meeting held in July. One of the concerns expressed at this meeting was the possibility that more rate hikes will be necessary in the future period in order to fight inflation. Several FOMC members were concerned that a tight job market could support further increase in inflation, which would require more rate hikes. Markets were holding to previous Fed Chair Powell's statement over possible two rate hikes till the end of this year. Since the Fed increased rates in July, markets were expecting another one in September through December. However, minutes revealed something on which markets were not prepared, and that is the possibility for further rate hikes, which made them reassess their economic growth prospectus for the next year. Minutes mentioned another important topic, which is related to FOMC members' concern over the issues in commercial real estate and problems which they can cause to some banks and financial institutions. The market reaction was that both the equities and crypto market lost in value during the week, while Treasury yields surged.
Coinbase announced that the company gained the regulatory approval from National Futures Association to offer crypto future products to US customers. The company also noted that it filed an application for this product in 2021. This approval refers to only federally regulated futures. News was perceived positively by the markets, as shares of Coinbase gained 5% after the announcement.
Although CBDC`s are still not officially launched, many companies are preparing for this moment, and trying to create full ecosystems around CBDC`s. One of the world’s largest payment and cards companies, Mastercard, organized a forum related to this topic, including some of the well-known names from the crypto industry, including Ripple, Fireblocks and Consensys. At this moment, their program partnership includes only discussions on innovation drives and efficiencies, however, it could be easily expanded in the future.
Crypto market cap
Final break to the downside occurred on the crypto market during the previous week. There are two major reasons which supported negative market sentiment. On the one side are published FOMC meeting minutes which revealed concerns of some FOMC members that more rate hikes will be necessary in the coming months / year in order to cope with inflation. There is also expressed concern over issues in commercial real estate which can bring potential negative consequences to some banks and financial institutions. At the same time, China's real estate market exposed some huge concerns, when big real estate company Country Garden defaulted on part of its bond payments, while the biggest player in this field, company Evergrande, filed for protection under the US bankruptcy law. Economists called such developments “a perfect storm” for financial markets. Not only that crypto market lost a significant portion of its value within a week, but was also followed by US equity markets.
Total crypto market capitalization decreased during the week by 9%, losing a total 107B. Daily trading volumes almost doubled during the week, trading around 65B on a daily basis, from 35B during the week before. Total crypto market capitalization increase since the beginning of this year currently stands at 36%, where it has added total 273B to the market cap.
All coins lost during the previous week, however, drop in value of 107B on a weekly basis was driven by major coins, which participated with 89% in this drop. BTC lost
68B or around 12% on a weekly basis, and was followed by ETH, with a drop of 
23B or more than 10%. XRP was another coin with a significant drop in value of 6.6B or less than 20%. BNB was down by almost 44B or 10.6%. DOGE decreased its value by 17% or 1.8B in nominal amounts. Both ADA and SOL dropped around 11B losing 9.8% and 11.5% in value respectively. Majority of all other altcoins lost between 10% and 20% in value. As for coins in circulation, Tether managed to lose 0.7% circulating coins in a single week, which is not recently seen on the market. At the same time, Solana increased its circulating coins by 0.4%.
Crypto futures market
Negative news and investor’s sentiment left its mark also on the crypto futures market. As per Coinglass data, around 11B loss in liquidations of long positions were wiped out from this market. It was one of the worst sell-offs of the year. Short term BTC futures ended the week around 11% lower from the week before, while ETH futures dropped by more than 10%. On a positive side is that longer term futures suffered a lower drop in prices.
BTC long term futures were down by more than 5%. Futures maturing in December this year ended the Friday`s trading session at level of $26.900, while those maturing in December next year were last traded at price $31.275. On a positive side is that December next year is still holding above 30K level.
ETH long term futures dropped more than 6%, with December 2023 ending the week at price $1.778. Futures maturing in December 2024 dropped below 2K level where they were managing to hold for a few weeks. Last price for those futures was $1.890.
China is evidently slowing down, while Fed's meeting minutes revealed the possibility for interest rates to move even higher from currently expected levels. Negative sentiment continues to prevail on financial markets. Both EU and US equities continued their negative trend for the third week in a row, while US Treasuries continue to rise. Bitcoin had the worst week since May this year, followed by other crypto coins. Markets are clearly revisiting their optimism from the beginning of this year.
China's housing market is passing through difficult times. During the previous week markets were hit by a series of negative news related to some Chinese big players within this industry. One of the largest real estate companies, Country Garden, defaulted on its bond payments on Monday. On the other side, by far the largest real estate company in China, Evergrande, registered in the US, filed for protection under the bankruptcy law in the US. The company was previously in trouble, trying to save the business through restructuring, but it failed to find supporting funds for that mission. Further destiny of the company is currently unknown.
Another important event which made an impact on market sentiment was a release of FOMC meeting minutes from its meeting held in July. One of the concerns expressed at this meeting was the possibility that more rate hikes will be necessary in the future period in order to fight inflation. Several FOMC members were concerned that a tight job market could support further increase in inflation, which would require more rate hikes. Markets were holding to previous Fed Chair Powell's statement over possible two rate hikes till the end of this year. Since the Fed increased rates in July, markets were expecting another one in September through December. However, minutes revealed something on which markets were not prepared, and that is the possibility for further rate hikes, which made them reassess their economic growth prospectus for the next year. Minutes mentioned another important topic, which is related to FOMC members' concern over the issues in commercial real estate and problems which they can cause to some banks and financial institutions. The market reaction was that both the equities and crypto market lost in value during the week, while Treasury yields surged.
Coinbase announced that the company gained the regulatory approval from National Futures Association to offer crypto future products to US customers. The company also noted that it filed an application for this product in 2021. This approval refers to only federally regulated futures. News was perceived positively by the markets, as shares of Coinbase gained 5% after the announcement.
Although CBDC`s are still not officially launched, many companies are preparing for this moment, and trying to create full ecosystems around CBDC`s. One of the world’s largest payment and cards companies, Mastercard, organized a forum related to this topic, including some of the well-known names from the crypto industry, including Ripple, Fireblocks and Consensys. At this moment, their program partnership includes only discussions on innovation drives and efficiencies, however, it could be easily expanded in the future.
Crypto market cap
Final break to the downside occurred on the crypto market during the previous week. There are two major reasons which supported negative market sentiment. On the one side are published FOMC meeting minutes which revealed concerns of some FOMC members that more rate hikes will be necessary in the coming months / year in order to cope with inflation. There is also expressed concern over issues in commercial real estate which can bring potential negative consequences to some banks and financial institutions. At the same time, China's real estate market exposed some huge concerns, when big real estate company Country Garden defaulted on part of its bond payments, while the biggest player in this field, company Evergrande, filed for protection under the US bankruptcy law. Economists called such developments “a perfect storm” for financial markets. Not only that crypto market lost a significant portion of its value within a week, but was also followed by US equity markets.
Total crypto market capitalization decreased during the week by 9%, losing a total 107B. Daily trading volumes almost doubled during the week, trading around 65B on a daily basis, from 35B during the week before. Total crypto market capitalization increase since the beginning of this year currently stands at 36%, where it has added total 273B to the market cap.
All coins lost during the previous week, however, drop in value of 107B on a weekly basis was driven by major coins, which participated with 89% in this drop. BTC lost
68B or around 12% on a weekly basis, and was followed by ETH, with a drop of 23B or more than 10%. XRP was another coin with a significant drop in value of 6.6B or less than 20%. BNB was down by almost 44B or 10.6%. DOGE decreased its value by 17% or 1.8B in nominal amounts. Both ADA and SOL dropped around 11B losing 9.8% and 11.5% in value respectively. Majority of all other altcoins lost between 10% and 20% in value. As for coins in circulation, Tether managed to lose 0.7% circulating coins in a single week, which is not recently seen on the market. At the same time, Solana increased its circulating coins by 0.4%.Crypto futures market
Negative news and investor’s sentiment left its mark also on the crypto futures market. As per Coinglass data, around 11B loss in liquidations of long positions were wiped out from this market. It was one of the worst sell-offs of the year. Short term BTC futures ended the week around 11% lower from the week before, while ETH futures dropped by more than 10%. On a positive side is that longer term futures suffered a lower drop in prices.
BTC long term futures were down by more than 5%. Futures maturing in December this year ended the Friday`s trading session at level of $26.900, while those maturing in December next year were last traded at price $31.275. On a positive side is that December next year is still holding above 30K level.
ETH long term futures dropped more than 6%, with December 2023 ending the week at price $1.778. Futures maturing in December 2024 dropped below 2K level where they were managing to hold for a few weeks. Last price for those futures was $1.890.
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