Markets Insights
Next FOMC meeting: July 26 2023.
- Probability of a 0bps hike → 3%
- Probability of a 25bps hike → 97%
The News Room
SEC accepts BlackRock’s Bitcoin ETF application, signaling regulatory review
The U.S. Securities and Exchange Commission (SEC) has accepted an application for a Bitcoin ETF by BlackRock, a significant milestone in the cryptocurrency space. The acceptance signals the commencement of a regulatory review process for the proposed ETF, which aims to provide traditional investors with exposure to Bitcoin through a publicly traded fund. If approved, this ETF would represent a significant step in legitimizing Bitcoin in the mainstream financial market and could lead to increased adoption and investment. However, it's important to note that the regulatory review process may take some time, and there are no guarantees of approval. Nevertheless, this move by the SEC showcases a growing interest in the potential of cryptocurrencies in the broader financial landscape.
Aave Protocol activates GHO stablecoin on the Ethereum mainnet
The Aave decentralized autonomous organization (DAO) has successfully deployed the Gho stablecoin on the Ethereum mainnet. Gho is a new stablecoin, and its deployment represents a significant development in the DeFi ecosystem. Stablecoins play a crucial role in providing stability and liquidity within the decentralized finance space, enabling users to access various financial services without exposure to the high volatility often associated with cryptocurrencies like Bitcoin and Ethereum. Aave's move to introduce Gho could bolster DeFi adoption, as it offers users an additional option for managing their assets in a more stable manner. As the Ethereum network continues to evolve, the deployment of new and innovative DeFi solutions like Gho will likely contribute to the growth and maturation of the DeFi ecosystem.
https://www.theblock.co/post/239688/aave-dao-deploys-gho-stablecoin-on-ethereum-mainnet
JPMorgan says Ripple's XRP ruling is a win for Coinbase
JPMorgan has partnered with Ripple and Coinbase to facilitate cross-border payments using Ripple's native cryptocurrency, XRP. The collaboration aims to leverage the efficiency and speed of XRP for international money transfers, potentially disrupting traditional banking systems. Ripple's blockchain technology has been gaining traction in the financial sector due to its ability to facilitate fast and low-cost cross-border transactions compared to conventional methods. By joining forces with Coinbase, a major cryptocurrency exchange, and JPMorgan, one of the largest global banks, Ripple aims to further expand the adoption of XRP and strengthen its position in the industry. This partnership signifies the growing interest of traditional financial institutions in exploring blockchain-based solutions for improving cross-border payments and remittances.
https://www.theblock.co/post/239775/jpmorgan-ripple-xrp-coinbase
TradFi
Upon examining China's economic statistics, it was revealed on Sunday evening that the GDP for the second quarter climbed to 6.3%, falling short of the anticipated 7.1%. In June, the unemployment rate among the youth, specifically those aged between 16 and 24, surged to 21.3%, marking a historic high. Even though China recently lowered its interest rates in an attempt to invigorate its economy, Beijing has generally been hesitant to implement more extensive stimulus measures. This caution is particularly noticeable as local government debt continues to escalate.
U.S. equity futures are maintaining a relatively steady position as we commence the week, with a flurry of corporate earnings anticipated. This comes off the back of a successful week for stocks, in which the Dow Jones Industrial Average enjoyed a 2.3% rise, marking its best weekly advancement since March. Similarly, the S&P 500 and Nasdaq Composite increased by 2.4% and 3.3% respectively.
On Wall Street, a degree of apprehension is being felt in anticipation of a potentially disappointing season marked by diminished profits. Analysts are projecting a decline exceeding 7% in S&P 500 earnings compared to the previous year, as per FactSet data.
The possibility of an increase in interest rates later this month is highly anticipated among market players, with the CME Group’s FedWatch tool indicating nearly a 97% probability. This follows a pause in hikes that occurred in June.
From a chartist point of view, the S&P500 is trading within a consolidation channel on an intraday basis. The index recently broke below a rising trend line and also pulled back from the top-end of the channel pattern, advocating for further pressure. If we break below the session lows, we may very well test the support level of 4495. Moving on with the daily chart, we can see that prices made yearly highs however the RSI hasn’t, which leads us to believe that we may be facing a bit of bearish divergence.
Upcoming:
- MONDAY: - ECB President Lagarde Speaks
- TUESDAY: - CAD CPI - US retail sales - Earnings: Bank of America, Morgan Stanley
- WEDNESDAY: - GBP CPI - EUR CPI - USD building permits - Earnings: Goldman Sachs, Tesla, Netflix, IBM
- THURSDAY: - US unemployment claims - US home sales - Earnings: TSMC
Bitcoin
Examining stablecoins for a moment, their combined trading volume in 2023 exceeds $3 trillion, with Tether playing a commanding role. As it stands, Tether boasts an impressive 70% market share on centralized exchanges.
Investments in digital asset products registered an inflow of US$137m in the past week. Subsequent revisions to the previous weekly data reveal a four-week total of US$742m in inflows, marking the most significant influx of funds since the fourth quarter of 2021.
BTCUSDT has pulled back towards the bottom-end of the consolidation channel and is looking for a rebound. If prices manage to break above 30,500 then we could expect a rise in prices towards 31,250 and possibly 31,800. A break below 29,900 might trigger bearish implications dragging prices lower towards 29,530 and possibly even lower.
Looking at the daily chart, we can see that prices have traded below their 20-day moving average for 4 consecutive days which hasn’t taken place since the first half of June. The RSI is capped by a declining trend line, indicating an exhaustion of the previous uptrend. If prices break below 29,500, then we might retest the 50-day moving average near 28,500.
- BTC > 27,500 → Bullish
- BTC < 27,500 → Neutral
- BTC < 24,850 → Bearish
Ethereum
Looking at ETHUSDT, prices have retraced towards the lower-end of the rising trend channel as expected, just like Bitcoin. After briefly touching our profit target of 1910, we are now looking for future direction. As long as prices are trading above the support of 1865 then we should expect to witness higher prices towards 1945 and possibly 2010.
ETHBTC is pulling back from the same resistance of 0.064 just like last time. A break of this price level would open the door for ETH to outperform BTC in the short term.
- ETH > 1910 → Bullish
- ETH < 1910 → Neutral
- ETH < 1630 → Bearish
Altcoin Watch - Solana (SOL)
Solana's price briefly surged to a new year-to-date peak on June 14 after Ripple’s partial win against the United States Securities Exchange and Commission in the case contesting XRP’s position as a security.
The token recorded gains of 48.09%, reaching a peak of $32.40 as news of the court ruling spread, before retracing below the $30.00 level.
The positive gains following the verdict not only eliminated the losses from June 2023 when the SEC considered SOL a security in its lawsuit against Binance and Coinbase, but it also reclaimed levels not seen since the FTX collapse in November 2022.
However, the network’s usage and market charts suggest that a long-term bullish price trend is unlikely, with the $30 level forming a crucial resistance level.
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.
Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.
Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
Contact Us
Start trading with Secure Digital Markets today by e-mailing:
Trading@securedigitalmarkets.com
SECUREDIGITALMARKETS.COM