First Mover Asia: Santa Claus Rally Sends Bitcoin North of $50K

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(Edited by James Rubin)

Good morning. Here’s what’s taking place:

Market strikes: The crypto market cheers for a “Santa rally” as bitcoin crossed a key value degree at $50,000.

Technician’s take (Editor’s word): Technician’s Take is taking a vacation hiatus. In its place, First Mover Asia is publishing the third in a collection of tales on the yr in cryptocurrency markets by CoinDesk markets analyst Damanick Dantes and Managing Editor of Markets Brad Keoun.

Catch the most recent episodes of CoinDesk TV for insightful interviews with crypto business leaders and evaluation.

Prices

Bitcoin (BTC): $50,691 +3.9%

Ether (ETH): $4,104 +2.8%

Markets

S&P 500: $4,725 +0.6%

DJIA: $35,950 +0.5%

Nasdaq: $15,653 +0.8%

Gold: $1,808 +0.2%

Market strikes

Bitcoin, the most important cryptocurrency by market capitalization, on Thursday broke above $50,000 for the primary time since Dec. 13. Major U.S. inventory indexes additionally rose amid improving U.S consumer sentiment in December.

Trading quantity, in the meantime, was low two days earlier than Christmas. Data compiled by CoinDesk confirmed that bitcoin’s buying and selling quantity throughout main centralized exchanges was solely barely greater than a day in the past.

Other cryptocurrencies adopted bitcoin’s bullish transfer: Ether’s value rose above $4,100 on Thursday, up over 3% over the previous 24 hours.

Crypto Twitter cheered for a so-called Santa rally for bitcoin. The oldest cryptocurrency by market capitalization struggled for greater than every week to maneuver above $50,000, whereas different different cryptocurrencies (altcoins) corresponding to LUNA and MATIC rallied to document highs.

Year-end market wrap

Market Wrap Year-End Review: Bitcoin Peaks as Coinbase Goes Public: Tesla’s bitcoin acceptance helped to ship the BTC value to an all-time excessive close to $65,000 in April, virtually unthinkable only a few months earlier. Coinbase’s direct inventory itemizing marked the precise date of the market prime. ((by Damanick Dantes and Brad Keoun)

Hello, Market Wrap readers! During the ultimate two weeks of 2021, we’re utilizing this house to recap the yr’s most dramatic moments in cryptocurrency markets – and spotlight the important thing classes from this fast-evolving nook of world finance. Over a collection of eight posts beginning on Dec. 20 and working via Dec. 30, we’ll recap what shook crypto markets this yr. (For the most recent digital-asset costs and information headlines, please scroll down.)

In Tuesday’s episode, we documented the social-media craze that fueled value rallies in bitcoin and dogecoin in January and February. Today, we’ll present how Tesla’s involvement in bitcoin despatched costs even greater in February and March. There was hype and ebullience main as much as the U.S. cryptocurrency change Coinbase’s direct inventory itemizing in April, however the rally rapidly fizzled.

From Tesla to Coinbase, bitcoin went up, then down

The bitcoin value broke above $50,000 in February after Tesla disclosed it had invested $1.5 billion into BTC.

The market response impressed a bit of opportunism on the half of one enterprising T-shirt vendor, who rushed to supply a T-shirt for $19.99 with the phrases “Elon’s Candle,” referring to the electrical car maker’s billionaire CEO, Elon Musk. The “candle” referred to the dramatic sample that appeared on bitcoin’s value chart because of this of the Musk-fueled value pop:

Elon's Candle T-shirt (The Doge Store)

In March, Musk ratcheted up the drama with a tweet stating that customers can “now buy a Tesla with bitcoin.”

The bulletins helped propel bitcoin, the oldest cryptocurrency, towards a beforehand unthinkable $1 trillion market capitalization for the primary time.

But from knowledgeable value chart reader’s perspective, bitcoin gave the impression to be “overbought;” that time period meant the market’s run-up had most likely gone too far, too quick and wasn’t justified by the underlying degree of shopping for curiosity on the new, elevated threshold.

Once once more, bitcoin turned decrease – dropping again to its 50-day shifting value common of round $30,000. Apparently, it was a degree the place patrons as soon as once more appeared to develop .

The market stabilization provided a sign to merchants: Bitcoin appeared to carry above the worth the place it had began 2021, at $29,112. That was trigger for renewed optimism.

So as information headlines in conventional monetary media and breathless commentators started to focus on the upcoming direct inventory itemizing of Coinbase, the most important U.S. cryptocurrency change, the bitcoin rally resumed.

Over the approaching months, the worth would greater than double, a reminder of simply how risky cryptocurrency markets may be.

Bitcoin daily price chart (Damanick Dantes/CoinDesk, TradingView)

Coinbase goes public

Coinbase CEO Brian Armstrong speaks Wednesday on CNBC. (Screenshot, modified by CoinDesk)

On April 14, Coinbase, the largest U.S. cryptocurrency exchange, went live with its direct stock listing on the Nasdaq exchange, under the ticker symbol COIN.

“This is a watershed moment for the digital-asset industry, as it signifies a larger moment of credibility for a market that is maturing rapidly,” Hunter Merghart, head of U.S. for rival cryptocurrency exchange Bitstamp, told CoinDesk in an interview.

The initial trading price for the COIN stock, at $381, was an impressive 52% above the reference price of $250 a share published a day earlier by the Nasdaq. But even that lofty price level was well below some of the price targets issued recently by stock analysts, with some estimates ranging as high as $600 a share.

The failure of COIN shares to push even higher suddenly seemed, well, deflating for a crypto market that had grown accustomed to prices constantly going higher.

By the end of the first day of trading, COIN’s stock price had dropped to $342.

The fading spirits spilled over into the bitcoin market: It turned out the hotly anticipated public trading debut of the cryptocurrency exchange wasn’t enough to sustain the twofold price rise in BTC over the prior couple of months.

Bitcoin stalled near an all-time high of around $64,800 on April 14 and quickly went into a sharp sell-off. The chart below shows slowing price momentum, defined by lower highs in the daily relative strength index (RSI), which typically precedes a decline in price.

Bitcoin every day value chart (Damanick Dantes/CoinDesk, TradingView)

The hotly anticipated COIN direct listing ended up being a classic “buy the rumor, sell the fact” event. In hindsight, the date of the Coinbase IPO would coincide with bitcoin’s top.

For seasoned crypto traders and newbies alike, the episode offered a fresh lesson in how even sky-high price predictions, euphoric rallies and milestones like the Coinbase direct stock listing do eventually come head to head with the reality of fickle and notoriously cryptocurrency markets, and down-to-earth valuations.

Important events

1 p.m. HGT/SGT (5 a.m. UTC): Japan housing starts (Nov. YoY)

1 p.m. HGT/SGT (5 a.m. UTC): Japan construction orders (Nov. YoY)

Christmas Eve!

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

Square CEO Jack Dorsey at War With Andreessen Horowitz Co-founder Over Web 3 Debate, Top Crypto Predictions for 2022

The “First Mover” hosts asked CoinList CEO Graham Jenkin about top crypto predictions for 2022 and spoke with Youbi Capital CEO Chen Li for crypto markets analysis.

Latest reads

India’s Crypto Law Might Not Be Ready Before May, Sources Say: The country’s draft cryptocurrency bill probably won’t become law until after next year’s Budget Session ends in April, adding to uncertainty about the state of crypto regulation in the nation.

Consultants Are Entering the Metaverse – Literally: SAND tokens are up on news of PwC Hong Kong acquiring a plot of LAND in The Sandbox.

Bakkt President Adam White Announces His Departure: The founding executive is leaving the Wall Street bitcoin firm. Where to next is unclear.

Telegram CEO Endorses TON Blockchain Spin-Off Toncoin: For the first time since Telegram abandoned TON in 2020, CEO Pavel Durov has backed one of the competing spin-off projects.

Jack Dorsey Goes on Unfollowing Frenzy After Web 3 Beef: Marc Andreessen, Brian Armstrong and Tyler Winklevoss have been cut out of the Twitter founder’s timeline.

Longer reads

Web 3 Is a Return to the Internet’s Wild Spirit: “I think that’s what audiences want, right?” writer and founder of freelance payments system OutVoice, Matt Saincome said.

Today’s crypto explainer: Who Created Ethereum?

Other voices: Crypto Gets Its Day With Congress (New York Magazine)

Said and heard

“Scrooge-jection.” (Bloomberg analyst Eric Balchunas) … “The fact that the SEC is disapproving faster than they needed to – we were optimistic about futures, but we’re not confident in a 2022 approval.” (Balchunas) … “The VCs are the problem.” (Block CEO Jack Dorsey on Twitter) … Don’t get distraught about your crypto losses. Losses happen to every investor. Instead, strategize about how you can put those losses to work, and continue to apply your newfound knowledge to future crypto investment plans. (TaxBit VP of Marketing Michelle O’Connor in a CoinDesk op-ed) … ”Omicron is looking more like a short-term disruption to the economic outlook and not a destructive headwind that knocks the economy off its course.” (MarketPulse analyst Ed Moya) … “This is a big opportunity.” (Michelin-starred Chef Floriano Pellegrino on the launch of his Let’s Make Out NFT) … ”Curious that Ethereum is still by far the leading NFT platform, and has increasing 30d sales while lower-cost alternatives have been declining. Seems it’s not all about cost – data from @cryptoslamio.” (Genesis Trading Head of Market Insights Noelle Acheson, a CoinDesk alum who now works for the CoinDesk sister company)