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Bitcoin Gives Up Gains Post New Year-Spiral, But $120K Bets Still Remain Hot

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The new year kicked off on a happy note with bitcoin (BTC) moving towards $100,000, putting behind the weak price of December. Amid the cheer, CoinDesk warned against being too optimistic, noting the undercurrents of sellers looking to reassert themselves.

A week later, BTC has pulled back to $93,000 after failing to keep gains above $100,000 on Monday, CoinDesk data show.

The latest downturn comes at a time of increased volatility in the U.S. Treasury market, where long-term yields have extended the Q4 2024 rally to hit multi-month highs due to economic data pointing to stubborn inflation in the U.S.

It is not just nominal bond yields, the real or inflation-adjusted yields are creeping up too. The yield on the 10-year U.S. inflation-indexed security has jumped to 2.29%, the highest since November 2023, according to charting platform TradingView.

When the yield offered by fixed-income products starts to look more attractive in real terms, the incentive to invest in risk assets diminishes. It’s particularly true when the uptick in the yield is driven by hawkish Fed expectations rather than economic growth.

That’s precisely the case this week. With data pointing to sticky inflation, traders have pushed the timing of the next Fed rate cut to June.

«This morning’s slide in the spot bitcoin price appears to be in response to higher yields in the Treasury market and the reduced likelihood of further rate cuts this year. This has impacted the short-term market outlook for crypto assets, which tend to fare better in more liquid conditions, «Thomas Erdosi, head of product at CF Benchmarks, told CoinDesk.

Note that the yield spike is not just a U.S.-centric issue. Yields are spiking across the major economies with Japan and the U.K. joining the fray. The U.K. is experiencing its highest long-end yields since 1998.

All this is impacting stocks, similar to what’s happening with BTC. Major indices like the Nasdaq and the S&P 500 have also lost their New Year gains.

But here is a twist: Despite the macro uncertainties, BTC’s Deribit-listed options market remains optimistic, with the dollar value of active calls tallying $14.87 billion at press time, nearly twice the value of active puts, according to data source Amberdata.

A call buyer is implicitly bullish on the market while a put buyer is bearish.

Moreover, the $120,000 strike call option remains the most popular, with a notional open interest of $1.47 billion. Calls at strikes $101,000 and $110,000 also boast an open interest of over $1 billion each. Meanwhile, the most popular put option at $75,000 has an open interest of $595 million.

Overall, calls expiring after January continue to trade at a notable premium to puts, reflecting a bullish bias.

«We could potentially see a change in market fortunes by the end of this month. The inauguration of President Trump on Jan. 20, heralding an increased likelihood of a much more favorable regulatory environment for crypto, could be a key driver in crypto market sentiment,» Erdosi added.

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Coinbase Outpaces S&P 500 With 43% June Rise as Stablecoin Narrative Grows: CNBC

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Shares of Nasdaq-listed cryptocurrency exchange Coinbase (COIN) rose 43% this month, making the firm the top performer in the S&P 500 since it joined the index at the end of last month.

June’s run is already the stock’s best since November and caps three straight monthly gains. Coinbase’s shares reached their highest level since their public debut.

COIN hit a $382 high this week before enduring a slight correction, ending the week at $353 and seeing a slight 0.7% drop in after-hours trading to $351.

The wider S&P 500 index rose roughly 5% in June as geopolitical tensions eased.

Washington’s progress on the GENIUS Act, Congress’s first rulebook for dollar-pegged stablecoins, helped shift investor focus from trading fees to stablecoin revenue.

The bill brightened the outlook for Circle, whose shares hit a record high and saw its market cap near that of Coinbase this week.

Coinbase keeps all yield on USDC balances held on its platform and nearly half of other USDC income, equal to about 99 percent of Circle’s revenue, giving shareholders indirect exposure at no added cost, CNBC reported Friday, citing analysts including Citizens’ head of financial technology research Devin Ryan.

Trading, however, remains subdued. Average daily volume on Coinbase has drifted lower since April.

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Robinhood Launches Micro Bitcoin, Solana and XRP Futures Contracts

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Robinhood (HOOD) has introduced micro futures on bitcoin (BTC), solana (SOL) and XRP in the United States., expanding its existing crypto futures offering for its nearly 26 million funded accounts.

Micro contracts need far less collateral than full-size futures, letting traders take directional positions while committing a smaller slice of capital.

The contracts offer traders more flexibility to bet on a cryptocurrency’s future price direction or hedge current positions given their smaller size.

The launch rounds out a futures suite that began with BTC and ETH in January. It also comes weeks after the firm closed its $200 million purchase of Bitstamp and finalized a $179 million deal for Canada’s WonderFi.

Robinhood’s data shows that crypto notional volumes have exploded upward over time, reaching $11.7 billion in May. The figure marks a 36% rise month-over-month, and a 65% growth year-over-year.

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Why is XRP Up Today? Trio of Catalysts Sees Token Outperform Wider Crypto Market

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XRP climbed 5.5% to $2.19 in the last 24 hours after a trio of catalysts converged to help the cryptocurrency outperform the wider cryptocurrency market.

One of the catalysts was launch of XRP micro futures on Robinhood. The contracts offer traders more flexibility to bet on the cryptocurrency’s future price direction or hedge current positions given their smaller size.

Regulatory fog also thinned. On Friday, Ripple withdrew its cross-appeal in its long-running U.S. Securities and Exchange Commission (SEC) lawsuit. The SEC sued Ripple back in 2020 over its XRP sales, alleging these violated securities laws. The SEC is expected to drop its own appeal, leaving last year’s ruling, ordering Ripple to pay a $125 million civil penalty to the SEC, intact. The move could lift a lid that had kept some investors on the sidelines.

On-chain data rounded out the bullish setup. The XRP Ledger logged over a 1.1 million active addresses over the past week according to crypto analyst Ali Martinez, who cited Glassnode data.

XRP’s rise saw it outperform the wider crypto market, with the broader CoinDesk 20 (CD20) index rising 1.7% in the last 24 hours.

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