Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good morning!
Markets performed well over the past week: At the time of writing, Bitcoin (BTC) is trading at $23.1k (+12.5% in 7 days), Ethereum (ETH) is trading at $1.6k (+33.9% in 7 days), and the ETH/BTC spread is trading at 0.06685 (+18.76% in 7 days).
What triggered the rally and will it be sustainable in the near- and mid-term? The current upward trend in crypto is unsurprisingly backed with a general risk-on sentiment in the market as the Nasdaq traded 6.3% higher over the past week. However, it is very questionable as to whether there is any macro-economic justification for the rally. On the positive side, the market was relieved that Nord Stream 1 resumed operations as planned (albeit at reduced levels).
Europe still struggling with inflation problems
There were hardly any positive developments: Mario Draghi finally resigned as prime minister, leaving Italy in political chaos with little hope for needed reforms. The ECB surprised with a 50bps hike, and provided further details on their Transmission Protection Instrument (TPI). The TPI is essentially a new bond purchase scheme that is meant to lower the spread between countries in the North and South. To put it simply: the ECB acknowledges the danger of a renewed debt crisis in the EU as interest rates need to rise to fight inflation, and seems willing to standby countries who might get into trouble (whatever it takes). A potenial showstopper could be various courts in member states, especially in Germany, where the federal constitutional court already ruled that a former stimulus programme was partly contrary to Germany's national constitution.
Ethereum on the right track
For once, there was some positive news from the crypto space as the ETH merge to Proof-of-Stake (PoS) could now come as early as mid-September. Ether finally completing the move to the much more energy efficient PoS certainly would be a big relief for the crypto market. The anticipation of success can most easily be observed in the discount of stETH vs. ETH, which shrank to only 2%. Coming back to the question posed earlier as to whether the move this week is sustainable. While the upward momentum of the recent rally was strong, more is needed to confirm a true trend change. We remain optimistic.
Happy Trading!
All intellectual property, proprietary and other rights and interests in this publication and the subject matter hereof are owned by Crypto Broker AG including, without limitation, all registered design, copyright, trademark and service mark rights.
Disclaimer
This publication provided by Crypto Broker AG, a corporate entity registered under Swiss law, is published for information purposes only. This publication shall not constitute any investment advice respectively does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. This publication is not intended for solicitation purposes but only for use as general information. All descriptions, examples and calculations contained in this publication are for illustrative purposes only. While reasonable care has been taken in the preparation of this publication to provide details that are accurate and not misleading at the time of publication, Crypto Broker AG (a) does not make any representations or warranties regarding the information contained herein, whether express or implied, including without limitation any implied warranty of merchantability or fitness for a particular purpose or any warranty with respect to the accuracy, correctness, quality, completeness or timeliness of such information, and (b) shall not be responsible or liable for any third party’s use of any information contained herein under any circumstances, including, without limitation, in connection with actual trading or otherwise or for any errors or omissions contained in this publication.
Risk disclosure
Investments in virtual currencies are high-risk investments with the risk of total loss of the investment and you should not invest in virtual currencies unless you understand and can bear the risks involved with such investments. No information provided in this publication shall constitute investment advice. Crypto Broker AG excludes its liability for any losses arising from the use of, or reliance on, information provided in this publication.
