The crypto market has lost confidence again this past week as macroeconomic decisions weigh heavily on the overall market. The U.S. and China have not resolved their commercial disputes and this has increased descending volatility in the crypto market. Should the new trade war persist, it will increase strong selling pressure and crypto prices will continue to drop.
Other international economic data that could affect crypto traders today is the Canadian September inflation data. Canadian markets intersect with crypto trends through institutional investments (as do most countries) and this may reflect on how the crypto market reacts. There will be no U.S. inflation data (and other crucial economic stats) until the government shutdown gets resolved.
The crypto market saw 20b USD flushed out as leveraged positions got wiped out this week. Some market analysts believe that this is a positive sign and that the market has reset and is ready for a bull run. The short-term outlook is overall stagnation as traders recover from the selloff but it will create a foundation for a more robust recovery once stability returns.
Will BTC Bounce??
Bitcoin dropped below 108k USD today after it popped on October 20th to over 110k USD but recovered from a price of 103k last Friday. BTC dropped 3% in the past day and is currently trading at 107.9k USD because of the lingering macroeconomic risks. Volatility continues as the U.S./China trade tensions continue. Many traders are reducing their risk ahead of the meeting between the two world leaders. Having said that, one whale trader has a 76m USD short position (10x leverage) and another has a 45m USD long position, affirming that there is opposition in where the market is currently headed.
It would appear that Saylor of Strategy has an optimistic outlook for BTC as they added another 168 more BTC yesterday, taking their total to 640,418 BTC at an average price of 74k USD. Analysts expect BTC to trade on the upside in the coming week as it has been consolidating between 110k and 107k USD and the overall market sentiment seems to favor an upside.
ETH Still in the Game
Ethereum seems to be stabilizing after a few weeks of extreme volatility. ETH did dip below important support levels but seems to be recovering even though the price fluctuated in the 700 USD range this week. The recovery seems to reflect the market’s optimism for an upcoming bull run after a week of significant liquidations. The large crypto asset managers saw a total ETF outflow of more that 187m in the past week but have experienced a reversal in the last few days. The current price of ETH is 3.9k USD and appears to have stabilized as upward momentum shifts in its favor.
Tether Expansion
One month ago, the CEO of Tether announced that it would raise between 15 to 20b USD through a private placement. This would enable the Tether strategy to maximize the scale across all the entire crypto market. If the deal proceeds and the funds are realized, Tether would be valued at approximately 500b USD and be in the company of other global giants such as Nvidia and Tesla. The CEO would like to achieve 100x growth in the coming years and is attainable if the funds invested.
Tether minted 1b USDT just after the crypto crash on October 10th expressing how the company plans to stabilize liquidity in the market. The minting states to the market that Tether is not fleeing adversity but is preparing for the next crash with stable liquidity. With substantial liquidity available in volatile times, access to this capital could assist company’s recover quicker from losses and reverse negative momentum.
Binance Compensation After October 10th Flash Crash
Binance had a slight price uptick in the past day as it announced that it would pay 400m USD in compensation to its users. This gesture of goodwill is to repair any loss of reputation that the company suffered during the crypto crash because of technical failures.
Some large DeFi exchanges did not experience the same disruptions that centralized exchanges experienced. The massive trading volumes on that day caused transaction errors and order delays. The compensation will cover verified losses but not unrealized profits.
The fact that the DeFi exchanges handled the volume without incident… no intervention, just free trading and on a decentralized code, highlighted the issues with centralized exchanges. While liquidity was strained on DEX’s, these exchanges continued to function despite high slippage and some TX delays.
Some traders have expressed anger over the lack of compensation in the past few days as they have accused Binance of fake compensation and deceitful advertising. Some traders lost over 30k and were told they weren’t eligible for compensation without a reason. Another trader stated that he met all the guidelines for compensation and was refused. CZ’s problems keep mounting as he fails to manage his users’ expectations and lack clear communication with them.
The past week has been another volatile one with severe market fluctuations and large liquidations. Most markets analysts are positive regarding the upcoming week and expect a rebound across the market led by BTC. The only issue could be the ongoing tensions between the U.S. and China and possible negative inflationary data. A good yardstick for the week could be massive inflows into ETFs which would signal a bullish trend.
