CoinLoan Weekly: Thawing out, green BTC, DOGE's ascent
Following a low of $19,278.63, BTC broke its modest range. The price surged to $20,295.75 on Tuesday, October 25, and $20,866.24 the next day. Friday, October 28, pulled it down to Tuesday's levels, but BTC sprang back and spent the weekend above $20,500. On Saturday, October 29, it reached a 7-day high of $20,924.82.
Tuesday's hike, fueled by Q3 earnings reports, pushed The Fear and Greed Index into the Fear territory, as it shot up to 33. In addition, the Bank of Canada announced a smaller-than-expected interest rate hike, while the US home sales data remained weak. This improving macro backdrop accompanied the largest short liquidations since July 2021. On Friday, BTC jumped again following a softer PCE (Personal Consumption Expenditures) price index increase for September.
As of this writing, BTC is trading at $20,381.05, with a 24-hour slip of -1.4% and a 7-day uptick of +4.1%.
Like BTC, ETH soared on Tuesday, October 25. From around $1,350, it sprinted to $1,500 on the earnings news, dipped, and leaped to $1,577.20 the following day. Friday, October 28, gave it another push, and the coin reached a 7-day high of $1,645.08 on Saturday, October 29.
ETH had stayed below $1,600 since the Merge on September 15. Between October 25 and 26, it gained $250, reaching $1,595 and causing $570 million in short seller liquidations at derivatives exchanges — the biggest in more than a year — followed by another $270 million on Saturday, October 29. Last week's liquidations amounted to over 9% of the ETH futures open interest.
As of now, ETH is trading at $1,563.86, with a 24-hour loss of -1.6% and 7-day growth of +14.6%.
Following a steep dive to $0.446619, XRP returned to $0.47 on Tuesday, October 25. Thursday, October 27, took it above $0.476, and the rally resumed late on Friday, October 28. The following day, XRP topped out, briefly peaking at $0.479406. The ensuing decline continued until Monday, October 31.
Investors remain uncertain about the ongoing legal battle between Ripple Labs and the SEC. In November, both parties will "file reply briefs, and, from there, await the judge's decision on the motions," according to the company's Q3 report published on October 27. It also states that Ripple Lab's XRP holdings have dropped below 50% of the total circulating supply for the first time in history.
As of now, XRP is trading at $0.451721, with a 24-hour drop of -2.2% and a 7-day decline of -3.7%.
BTC is green while big tech stocks crumble
For weeks, BTC was stuck below $20,000. Then, on Tuesday, October 25, crypto aficionados finally rejoiced: the coin rose from $19,808.06 to $20,126.20 in just one hour between 1 p.m. and 2 p.m. ET.
Not only was this jump significant, but it also contradicted cheerless news for the big tech — the stocks of giants like Meta Platforms Inc. and Amazon.com Inc. tumbled. In one week, BTC and ETH gained nearly 8% and 20%, respectively. According to Walter Teng, Fundstrat's vice president of digital-asset strategy, "digital asset markets have shown early signs of decoupling from tech."
- Wednesday, October 26, gave hope that central banks might let up on their rate hikes. As the Bank of Canada raised its benchmark rate by 50 basis points instead of 75, the implication that the economy was cooling enough had a knock-on effect on crypto.
- On the same day, the US Census Bureau reported a 10.9% decrease in new home sales in September. Lately, the housing market has been a strong inflation driver, so the Fed could become less inclined to persevere with its hawkish stance.
- Across the pond, the newly elected Prime Minister laid the foundation for regulations that could integrate crypto into the UK's economic strategy. Rishi Sunak has expressed his desire to "make the UK a global cryptoasset technology hub."
- Short liquidations on bearish derivatives grew, according to a report by Greg Cipolaro, global head of research at NYDIG. On October 26-27, overseas exchanges saw liquidations of short futures and perpetual swap contracts for BTC worth $615 million, combined with $462 million of liquidations on ETH.
Safe haven potential
Bank of America's digital strategists Alkesh Shah and Andrew Moss suggest BTC may be turning into a safe haven. Its 40-day correlation with gold has risen from around zero to around 0.50 since mid-August. "A decelerating positive correlation with SPX/QQQ and a rapidly rising correlation with XAU indicate that investors may view Bitcoin as a relative safe haven as macro uncertainty continues and a market bottom remains to be seen," Shah and Moss wrote in a note.
Over the past few years, BTC has largely mirrored risk assets, which reacted to the pandemic-era stimulus and aggressive interest rate hikes. The described outcome would fit one of the key narratives in crypto — the notion of a fixed-supply asset that serves as digital gold immune to the influence of centralized institutions.
DOGE becomes the sixth-biggest cryptocurrency
After months of less-than-stellar performance, Dogecoin is at a 6-month high. The meme-based cryptocurrency is 150% up since Tuesday, October 26 — its price has rocketed from $0.0594 to nearly 15 cents. Previously, it was mostly flat, hovering under $0.07 since mid-June.
In terms of market cap, DOGE has eclipsed Cardano's ADA, becoming the sixth-largest cryptocurrency. With over $16 billion, it also beats 120+ members of the S&P 500. ADA is lagging behind with $14 billion.
The coin is rallying on the news of Elon Musk's Twitter deal. The Tesla CEO, a long-time vocal supporter of DOGE, wrapped up his $44-billion purchase on October 27, taking the company private. Extending the gains, Dogecoin soared by over 70% on October 29. The Shiba Inu (SHIB) token, which has historically mirrored its pumps, could also rally, according to Santiment.
Under former CEO Jack Dorsey, Twitter began exploring ways to incorporate blockchain technology. While his plans for Dogecoin are still unclear, Musk's move made a merge between the platform and the meme coin more likely. Previously, he suggested using DOGE to limit bots and spam and charge users for their tweets.
Binance, which has invested $500 million into the buyout, is brainstorming integration strategies. In a statement for Decrypt, CEO Changpeng Zhao said, "We're excited to be able to help Elon realize a new vision for Twitter. We aim to play a role in bringing social media and Web3 together in order to broaden the use and adoption of crypto and blockchain technology."
Musk has a history of influencing the prices of DOGE and BTC. By calling the meme coin the "people's crypto," he turned it into a hot speculative asset. Tesla fans have been buying its merchandise for DOGE since early 2022, and Musk's bizarre perfume brand Burnt Hair also accepts it. Following the sealing of the Twitter deal, Cardano founder Charles Hoskinson offered Dogecoin free migration to the Cardano sidechain.
As for Twitter, Musk has mentioned turning it into an "everything app." This concept is embodied by WeChat, an Asian social media platform where users not only communicate, but shop online, make transfers, and pay bills.
In the future, a system of tweet ratings could enable Twitter users to choose a version of the platform they like. "Being able to select which version of Twitter you want is probably better, much as it would be for a movie maturity rating," Musk tweeted.
Twitter fans also expect reinstatement of banned accounts, as the billionaire has promised to restore free speech. According to his recent tweet, all reinstatements and significant content decisions will involve a content moderation council "with widely diverse viewpoints."