Markets Insights
Next FOMC meeting: Sept 20th 2023.
- Probability of a 0bps hike → 86.5%
- Probability of a 25bps hike → 13.5%
The News Room
Ripple Opposes SEC's Anticipated Appeal Following Summary Judgment Victory
Ripple has filed an opposition to an expected interlocutory appeal from the U.S. Securities and Exchange Commission (SEC). The SEC had previously accused Ripple in December 2020 of violating securities regulations through the sale of the XRP token. On July 13, 2023, Ripple won a summary judgment, determining that their programmatic or public exchange sales of XRP weren't securities offerings. The SEC, on Aug. 9, revealed its intent to challenge the judgment.
In its recent filing, Ripple contends that the SEC's anticipated appeal strays from its earlier focus and argues that the unique conditions required for such an appeal don't exist. Ripple emphasized that the case isn't purely a legal matter but one intertwined with various facts under the Howey test. It also refuted the SEC's claims of an "intra-district split." Ripple believes the SEC's appeal won't expedite the case's conclusion but might lead to additional legal complications. Separate from this, the SEC has categorized Ripple's institutional sales as securities, and two Ripple members are scheduled for a jury trial due to their sales participation.
Valkyrie Applies for Ether Futures ETF
Valkyrie has submitted an application for an ether futures ETF, joining other firms such as Volatility Shares, Bitwise Asset Management, and Grayscale in focusing on ether futures offerings. The filing with the US Securities and Exchange Commission reveals Valkyrie's plans to invest in standardized, cash-settled ether futures contracts available on the Chicago Mercantile Exchange. Valkyrie also previously filed to rename its Valkyrie Bitcoin Strategy ETF, aiming to incorporate both Bitcoin and Ether futures. Despite past unsuccessful bids by firms like VanEck and ProShares to launch ether futures ETFs in 2021, the SEC appears more receptive to such proposals now.
Sichuan Province in China Aims to Build $34.4 Billion Metaverse Industry by 2025
Sichuan, a province in southwestern China known for its previous crypto mining activities, has revealed plans to foster the growth of the metaverse industry to a value of 250 billion yuan ($34.4 billion) by 2025. The provincial government aims to establish metaverse-related industrial parks and support the growth of at least 15 major metaverse companies.
The initiative will focus on enhancing blockchain infrastructure, digital governance, personal data protection, and internet security. Despite China's cryptocurrency transaction ban in 2021, the nation remains keen on advancing its blockchain technology sector, with big players like Alibaba and Tencent leading in consortium blockchain development.
Trading Desk Insights
Stock futures edged higher then started to trade lower on Thursday in response to the Federal Reserve's recent statements. The central bank indicated that future rate hikes remain a possibility. Policymakers highlighted ongoing inflationary concerns, suggesting that monetary policy adjustments could be forthcoming, contingent upon economic conditions.
US treasury yields have been steadily grinding higher since the lows posted in April. The 10-year yield is matching October 2022 highs and is 6bps away from breaking it to reach the highest level since November 2007.
From a technical point of view, the S&P500 has been trading within this declining trend channel since the yearly highs. Market participants have been more buyers near the bottom of this pattern while the bears have taken control when prices were trading near the top-end. As we start to rebound from the bottom-end of this pattern, it’s possible that this trend continues towards the 4470 mark before coming back down further.
Bitcoin is trading at its lowest level since the month of June. Prices have come down a bit since the latest commentary from the Federal Reserve. We have finally broken past our 28,500 support and are now eyeing the next support near 27,250 - 27,500. This range will be very interesting as it intersects with the rising trend line that has been in place since the start of the year. It also intersects with the 200-day moving average which has usually served as a great support or resistance level. The RSI also broke below a rising trend line formed in March, indicating a potential trend shift.
ETHUSDT has broken below its support of 1800 and is trending lower towards its next support of 1710. The pair is currently breaking below a rising trend channel that has been in place since November, advocating for further pressure ahead. As we get closer to oversold levels in the RSI, a rebound off the 30 mark would be crucial to consider long positions.
ETHBTC isn’t showing any reversal signs yet as 0.064 seems to act like a good resistance level for now. As Bitcoin continues to attract all the attention and capital inflows, we believe ETHBTC will remain steady or trend lower unless we witness the start of altcoin season which technically should push ETHBTC higher.
Economic calendar:
MONDAY
TUESDAY
- CAD CPI
- US retail sales
WEDNESDAY
- Crude oil inventories
- FOMC meeting minutes
THURSDAY
- US unemployment claims
- US Philly Fed Manufacturing Index
FRIDAY
Technical Charts
Altcoin Watch
Aave holders recently voted on two proposals to mitigate the Curve liquidation crisis.
In light of enhancing the platform's stability and governance, the team is considering two significant proposals: firstly, discontinuing the provision for borrowing CRV – Curve's esteemed governance token – on both Ethereum and Polygon V3 platforms; secondly, adjusting the liquidation threshold for CRV to a more conservative level.
Let’s take a look at the daily chart.
AAVEUSDT has been trading within a declining triangle since the Summer of 2022. The RSI is currently capped by a declining trend line, advocating for further downside. If prices reach the lower end of this pattern near $45 - $50, it might serve as a good entry point to consider a long position with a tight stop loss.
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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