July 27, 2023

Markets Insights

Next FOMC meeting: July 26 2023.

  • Probability of a 0bps hike → 0%
  • Probability of a 25bps hike → 100%

The News Room

German political parties split on how to regulate increasing AI adoption

German political parties are divided on how to regulate the increasing adoption of artificial intelligence (AI). Ahead of the country's federal elections, different parties have presented contrasting approaches to AI regulation, reflecting differing views on balancing innovation and privacy concerns. The discussions highlight the complexities of developing a comprehensive AI regulatory framework that fosters technological advancement while safeguarding data privacy and individual rights. As AI continues to play an integral role in various industries, the outcome of the elections and subsequent regulatory decisions could significantly impact AI development and adoption in Germany.


US stablecoin talks stall, as senior House Republican blames White House

The High Court of Singapore has ruled that cryptocurrencies are legally considered "personal property," providing legal clarity and recognition for digital assets in the country. The court's ruling compares cryptocurrencies to fiat money, implying that they possess similar characteristics as assets. This legal recognition is significant for the cryptocurrency industry in Singapore as it offers greater legal protection and clarity for individuals and businesses involved in crypto transactions. With clearer regulations and definitions, the ruling could pave the way for increased institutional participation and investment in the Singaporean crypto market.


Elon Musk’s acquisition of Twitter’s ‘X’ handle sparks widespread decentralization discussion

Elon Musk's acquisition of the Twitter handle "x" has sparked discussions about decentralization. As Musk sought to acquire the handle through a secondary market transaction, questions have arisen about the control and ownership of online identities and the role of centralized platforms. The incident underscores the potential impact of individual influencers and centralized platforms in shaping the digital landscape. It also raises broader conversations about the need for decentralized alternatives and user ownership of digital assets and identities.


EthStorage reaches $100 million valuation in seed token round

Ethstorage, a decentralized finance (DeFi) protocol, has raised funding at a valuation of $100 million. The protocol aims to facilitate tokenized asset storage on the Ethereum blockchain, providing users with a secure and decentralized solution for storing digital assets. The successful funding round signifies growing investor interest in DeFi projects that address security and storage challenges within the blockchain ecosystem. As the DeFi space continues to evolve, innovative protocols like Ethstorage offer valuable solutions and contribute to the maturation of the decentralized finance industry.


Trading Desk Insights

The Federal Reserve approved a much-anticipated interest rate hike, propelling the federal funds rate to a bracket of 5.25% - 5.50%, a height unseen for over two decades. Despite indications of two prospective rate increases given at their June meeting, market participants are leaning more towards a likelihood that there may not be any further adjustments this year. Chairman Jerome Powell has assured that decisions will be informed by data and will be evaluated on a "meeting-by-meeting" basis.

“I would say it’s certainly possible that we will raise funds again at the September meeting if the data warranted,”

“And I would also say it’s possible that we would choose to hold steady and we’re going to be making careful assessments, as I said, meeting by meeting.”
The economy has demonstrated unexpected endurance in the face of these rate increases, with a surge in GDP of 2.4% announced this morning, outperforming the anticipated 1.8% and outstripping the prior rate of 2%.

Equity futures witnessed a rise as investors assimilated robust GDP data and corporate earnings announcements. Meta Platforms saw their shares surge over 8% following results that surpassed expectations coupled with promising guidance. The improvement in the company's performance was mainly due to a recovery in advertisement revenue. McDonald's shares experienced a 2% increase after posting earnings that exceeded expectations, partially due to a recovery in sales in China. FactSet data shows that 81% of companies that have so far reported earnings have surpassed analysts' expectations.

Meta's pivot cost the social media giant billions of dollars, but the company’s founder and CEO Mark Zuckerberg says the firm isn't giving up on the metaverse anytime soon.

“Our investments in AI continue. We remain fully committed to the Metaverse vision as well. We've been working on both of these two major priorities for many years in parallel now, and in many ways the two areas are overlapping and complementary,” Mark Zuckerberg said in an earnings call.

Moving on with the crypto market, on an intraday basis, BTCUSDT has been trading within a falling broadening wedge pattern that has been in place since July 14th. The previous support area of 29,500 - 29,700 has now transformed into resistance. While prices surged yesterday afternoon towards 29,700, it then was brought back to reality as prices dropped 1.3% back to the 29,300 mark. The RSI remains capped by a declining trend line, meaning the trend remains bearish on an intraday basis.

ETHBTC is still stuck in a tight range as it can’t seem to break above the resistance level of 0.064. A break above this level would allow ETH to outperform BTC and might trigger a risk-on sentiment for the rest of the market.

According to the CME, the institutional interest of Bitcoin futures continued to increase throughout the quarter as investors sought regulated venues/products to hedge rising market volatility and manage risk and exposure. Open interest in standard bitcoin futures contracts averaged a record 14,800 contracts through the first half, a 15% rise compared to 2022. Meanwhile, open interest in bitcoin options averaged a record 9,400 contracts, confirming an impressive 175% rise versus 2022.

Altcoins have been quite choppy lately as BTC is trying to find a clear direction. MKR, Marker’s token, has been gaining more traction lately as the lending protocol is considering boosting its DAI savings rate to 8%. LINK, SOL and XLM continue to attract more interest across the market.

Economic Calendar:


  • US new home sales
  • US Fed decision
  • Earnings → Meta & Boeing


  • ECB decision
  • US advance GDP + unemployment claims
  • BOJ decision
  • Earnings → McDonalds & Intel


  • US core PCE index
  • US consumer sentiment
  • Earnings → Exxon Mobil

Altcoin Analysis - Solana (SOL)

Assets under management (AUM) for investment funds linked to Stellar’s XLM, Ripple’s XRP and Solana’s SOL surged higher in July, according to a report from CCData.

Most of the AUM boost came on July 14, one day after a U.S. judge ruled the sale of XRP tokens on exchanges did not constitute investment contracts.

The decision led to sharp price gains across the crypto sector, particularly for XRP itself as well as other altcoins, XLM and SOL among them.

SOL/USDT - On the daily chart, structure has been bullish since 8th July. Price has just retraced into the demand region which has so far provided a bullish reaction. We are likely to see this upward move continue, as the wick that reached $32 has been left unmitigated.


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.

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