First Mover Asia: With encouraging macro and technical signs, Bitcoin Regains $27K.
by 玥芸 杨 May 15, 2023
ALSO: The stablecoin supply ratio has dropped 11% over the past 11 days, suggesting that buying power for stablecoins may be increasing, writes CoinDesk analyst Glenn Williams.
Good morning. Here’s what’s happening:
Prices: Bitcoin was trading over $27K to recover some lost ground from its plunge last week.
Insights: The stablecoin supply ratio drop of the past 11 days suggests a potential increase in buying power for stablecoins.
Prices
Hopeful Signs for BTC at $27K
After seven days of plunging prices, bitcoin steadied.
The largest cryptocurrency by market capitalization was recently trading at about $27,165, up 1.1% over the past 24 hours and a little above where it stood when the weekend began. BTC remains down more than 10% since May 5 when it started its most recent swoon, the result of profit-taking and low liquidity against a backdrop of industry-focused and macroeconomic uncertainties.
"Financial markets in general (are) driven by risk, by liquidity, and so, not surprising right now, when people are fearing risk assets as a whole, we're seeing large swaths of selling," Ryan Rasmussen, an analyst for crypto fund manager Bitwise, told CoinDesk TV's "First Mover" program on Friday.
"When there's less liquidity, you're going to have larger swings in price whenever an asset (is) sold." But he added: "There will be more liquidity come into crypto."
Ether, the second largest crypto in market value, was changing hands near $1,800, down a few fractions of a percentage point and about the same level as early Saturday. Other major cryptos moved into green territory as the Asia trading week began with Litecoin recently up more than 5.7%. The CoinDesk Market Index, a measure of the crypto market's performance, was up 0.8%.
Leading Asia indexes were mixed with the Nikkei up about 0.5% but the Hang Seng down 0.2%. Rasmussen noted the declining correlation between crypto and traditional asset markets, which were mixed last week with the tech heavy Nasdaq Composite up slightly over the most recent five days but the S&P 500 and Dow Jones Industrial Average (DJIA) falling 0.2% and 1.1%, respectively.
"Any kind of mistrust in traditional financial systems plays into the hands of crypto," Rasmussen said, adding: "I'm happy to see the correlation fall between traditional risk assets, traditional equities and crypto."
In an email to CoinDesk, Joe DiPasquale, the CEO of crypto fund manager BitBull Capital, noted that the current "macroeconomic situation around the world is creating a conducive environment for crypto assets to thrive."
This week, DiPasquale is looking for bitcoin's price to hold steady in a range between $25,000 and $27,000 "before bouncing toward $30K again."
"We don’t think the market needs a catalyst in the immediate term," he wrote. "It is only a matter of time before we see another major rally."
Insights
What Does the Recent Stablecoin Supply Ratio Mean for Bitcoin?
The Stablecoin Supply Ratio (SSR) has declined approximately 11% over the most recent 11 days, indicating a potential increase in buying pressure for bitcoin.
The metric, which measures the ratio of bitcoin’s market capitalization to the market cap of stablecoins, gives insight into the supply-and-demand dynamics between stablecoins (used as a vehicle to purchase cryptocurrencies) and BTC itself.
A higher SSR indicates that buying power is weakening, while lower values indicate that buying power is increasing.
The recent SSR drop follows a 52% increase between March and May 5. The pivot indicates that additional cash or liquid reserves have entered the market, and could lead to higher BTC prices.
Ethereum’s Shanghai upgrade, which allowed withdrawals from its proof-of-stake network starting in April, unleashed fresh demand to stake the second largest cryptocurrency. Staking lets crypto owners lock up tokens to participate in securing the network as a validator in exchange for a reward, making it a popular investment among long-term investors including institutional investors.
Some of the filing continues to reiterate Coinbase's already-live public statements, arguing that current SEC Chair Gary Gensler changed his position on the regulator's authority over crypto between taking office in April 2021 and mid-2022; saying the company has asked for regulation; and noting that Congress has started looking at the issue of crypto regulation.
Furthermore, it introduces the prospect of mandatory reimbursement for victims of Authorised Push Payment (APP) scams. APP scams have been a prevalent issue in the UK, with the bill targeting tighter controls on those who approve financial promotions for others, thereby bringing more accountability to the financial ecosystem.