Recurring market commentary on what's happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
The market was hit by some more bad news at the beginning of the week. And this put the market into “risk-off” mode. This time it was about the insolvency of the second-largest property developer in China: the Evergrande Group. The company is snowed under by its crushing debt of $300 billion and its fear of the fallout of several bond payments. Overall uncertainty is still swirling around as a payment deadline was surpassed yesterday, and they have still not confirmed publicly whether payment has been made or not – or if payment is planned. Some analysts compare the situation to that of the Lehman Brothers crisis back in 2008. Others judge the situation as a local-only issue, where a government bailout would be easy.
After its recent shutdown in China, the mining industry has already managed to recover a bit, and the hashrate (TH/s) of the Bitcoin network has definitively stabilised after the massive drop. It has even started to increase over the last couple of weeks.
But now back to the market. Bitcoin (BTC) dropped to $40,000 and then recovered towards $44,500 at the end of the week. Short-term volatility decreased before the September expiry, and overall funding rates traded slightly negatively.
Bitcoin BTC (daily)
Outstanding derivatives positions are at a record high, which means that larger expiry moves are to be expected between the support level of $40,000 and the resistance of $50,000. Ethereum (ETH) saw similar market moves, and the ETHBTC spread has returned to trading at the resistance level of 0.069. Our desk has experienced massive flows in ETH as investors have been taking short-term trading positions.
Ethereum ETH (daily)
All eyes are on China, but it is also important to mention the fact that the Federal Reserve signalled the possibility of six or seven rate hikes up through 2024.
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