FTSE: Worse than Expected Retail Sales Send Stocks Lower

Posted on May 24, 2024 by Gino Bruno D'Alessio

UK stocks continue to fall after losing 1.55% in the previous 2 sessions. Retails sales add to the woes of high interest rates for longer.

Retail sales data released this morning showed a drop of 2.7% YoY compared to last month’s increase of 0.4%. The market was expecting a decline in consumer activity, but consensus was at -0.2%.

The large surprise in the decline of shoppers’ habits pushed the [[FTSE]] lower again in the early trading session. Despite the fact that often weak economic data has often sent stocks higher, since the market perceived greater chances of monetary policing easing.

But today’s figure for retail sales was greatly unexpected and so large a drop, at this point outweighing the positives from interest cuts. Later today we’re expecting Durable Goods Orders from the US.

This data is expected to show a decline of 0.8% MoM, compared to last month’s increase of 2.6%. I would expect that a low number would send stocks higher as it gives way to a more likely monetary easing from the Fed.

Technical View

The day chart below for the FTSE shows a correction underway within a major bullish trend. The correction comes after a new all-time high was posted on May 15. The RSI has been well above 70 for an extended period and broke below that level 2 candles back.

The break below signaled a possible correction, and that possibility seems to be playing out. Yesterday’s candle closed below the Fibonacci retracement support of 8309 (red line) and today’s candle should find support at the next Fibonacci support of 8202 (orange line).

The 8202 level also coincides with support from a previous high posted in April, which should make it harder to break. A close below that line should lead to further lows the following support at 8116 or 50% retracement level.

[[FTSE-graph]]

Ondo Finance Soars as “Strongest Ethereum Beta” Ahead of ETF Approval

Posted on May 24, 2024May 24, 2024 by Arslan Butt

Coinbase-backed Ondo Finance (ONDO) has emerged as a frontrunner among Ethereum (ETH) plays, surging in price and popularity amid spot Ethereum ETF approvals by the US SEC.

Why is Ondo Trending?

Crypto traders are calling Ondo the “strongest Ethereum beta” due to its potential to benefit from rising ETH prices. This is fueled by speculation that a spot Ethereum ETF is on the horizon, mirroring the recent approval of a Bitcoin ETF.

Ondo Finance recently shifted its backing assets to BlackRock’s BUIDL tokenized fund, aligning with CEO Larry Fink’s focus on tokenization. This move strengthens Ondo’s connection to a major financial player and the broader trend of tokenized assets.

On-chain data from DeFiLlama shows Ondo’s total value locked (TVL) hitting an all-time high of $453 million, indicating growing investor confidence. Additionally, IntoTheBlock data reveals a surge in large transaction volume and a high percentage of profitable holders, suggesting bullish sentiment.

Coinbase Integration and Price Performance

Coinbase’s recent addition of Ondo to its perpetual markets has boosted trading activity and accessibility for users. The price of ONDO has jumped nearly 14% in the last 24 hours and 25% over the past week, reflecting positive market response. It’s currently trading near its all-time high.

ONDO/USD Technical Analysis

Technical analysis suggests a potential breakout for Ondo, with some analysts predicting a rise towards $1.25. However, failure to surpass the all-time high could lead to a correction.

The current Fear & Greed Index at 74 indicates Greed, which might signal a potential market overcorrection.

Bitcoin Falls Even As Hash Rate Steadily Recovers, Breakout above $72,000 Crucial

Posted on May 24, 2024 by Dalmas Ngetich

Bitcoin extended losses yesterday, plunging below $68,000 as bears pressed on, reversing gains of May 20. Even with the series of lower lows, the path of least resistance, at least when looking at the candlestick arrangement in the daily chart, is upwards. Overall, buyers are in control, especially if the zone between $66,000 and $68,000 holds, soaking up attempts for bears to rewind this week’s gains.

Following the state of price action in the daily chart, Bitcoin is under pressure at spot rates. The coin is down 3% on the last day but up 24% in the previous trading week. The uptrend remains as long as the $66,000 and $68,000 support zone remains. For this reason, traders should also watch participation as prices gyrate inside the May 20 bull bar. In the previous 24 hours, it stood at a decent $43 billion.

So far, the following Bitcoin news events are worth tracking:

Yesterday, the United States House of Representatives passed the H.R.5403 – CBDC Anti-Surveillance State Act. What this means is that the country won’t proceed to launch CBDCs. Representatives cited privacy concerns associated with the mass rollout of this product by central banks.
Even with the drop in hash rate—a measure of Bitcoin’s computing power—the network is recovering. The reading stands above the 632 EH/s level, which is around the multi-month high.

Bitcoin Price Analysis

Bitcoin is under pressure, looking at the performance in the daily chart.

Despite the weakness, the [[BTC/USD]] price is technically in an uptrend. Notably, prices are still inside the May 20 wide-ranging bull bar, pointing to strength.

At the same time, bears have failed to wipe out May 20 gains. The series of recent lower lows are with light trading volume as well.

Aggressive traders can buy on dips above the $66,000 support area. Conversely, risk-on traders can wait for a clean break above $72,000 before considering longs.

In both cases, the first target will be the March 2024 all-time high of $73,800.

Puell Multiple Indicates Bitcoin is Currently Undervalued

Posted on May 24, 2024 by Arslan Butt

On-chain data reveals that the Bitcoin Puell Multiple has dipped into the “undervalued” category, marking the first time this has occurred in over a year.

This decline could signal a significant shift in the market, potentially indicating a favourable buying opportunity for investors.

Understanding the Puell Multiple

The Puell Multiple is an on-chain metric that evaluates the ratio of Bitcoin miners’ daily earnings to the 365-day moving average (MA) of these earnings.

Miners generate revenue through two primary sources: block rewards and transaction fees. Block rewards are earned by adding new blocks to the blockchain, while transaction fees are collected for processing transactions within those blocks.

The Calculation of Puell Multiple

In the context of the Puell Multiple, the block reward is typically considered a fixed value in terms of Bitcoin (BTC). However, its value in USD fluctuates based on the current Bitcoin price.

Therefore, the Puell Multiple measures miners’ revenue in USD, linking it directly to Bitcoin’s market price. When the Puell Multiple exceeds one, it suggests that miners are earning more than the yearly average, indicating that Bitcoin might be overvalued.

Conversely, a value below one implies that miners are earning less than usual, signaling potential undervaluation.

Recent Trends in the Puell Multiple

Recently, the Puell Multiple has experienced a sharp decline. The 7-day moving average of this metric has fallen below one, a significant development not seen in over a year.

This drop occurred even as Bitcoin’s price has remained relatively stable, consolidating sideways rather than declining.

Impact of the Halving Event

The recent decrease in the Puell Multiple can be attributed to a crucial event: the Bitcoin halving. This event, which occurs approximately every four years, reduces the block reward by half.

The most recent halving took place last month, leading to a substantial reduction in miners’ revenues. Consequently, despite stable Bitcoin prices, the Puell Multiple has plunged, reflecting the diminished earnings of miners.

Implications for Investors

The drop in the Puell Multiple below one is a noteworthy signal for investors. According to a CryptoQuant expert, this decline may be interpreted as the market adjusting to a new phase of scarcity. Historically, such adjustments have often preceded significant price rallies.

Therefore, investors might view the current undervaluation indicated by the Puell Multiple as a potential buying opportunity, anticipating a future increase in Bitcoin’s value.

Current Bitcoin Market Conditions

As of now, Bitcoin is trading at approximately $67,800, representing a 5% increase from the previous week. Despite the recent stability in price, the significant drop in the Puell Multiple underscores the impact of the halving event on miner revenues and highlights a period of potential undervaluation.

Conclusion

The recent decline of the Bitcoin Puell Multiple into the “undervalued” category is a critical development for the cryptocurrency market. This metric, which links miner revenues to Bitcoin’s price, suggests that the market is adjusting to reduced block rewards post-halving.

For investors, this period of undervaluation might indicate an opportune time to invest, potentially leading to substantial returns if the market follows historical patterns and rallies in response to increased scarcity.

As always, market participants should stay informed and consider both technical indicators and broader market conditions when making investment decisions.

Spot Ethereum ETFs Approved, Bulls Must Keep ETH Above $3,700: Here’s why

Posted on May 24, 2024 by Dalmas Ngetich

Ethereum is firm at spot rates, impressively trading above $3,700 at press time. Yesterday, there was a rejection following the printing of the long upper wick. Usually, this means that there was liquidation from peaks, and prices closed much lower. Even so, since the bar ended up green, prices might spring back stronger in the days ahead. For now, $4,100 is a key line to watch.

As mentioned earlier, the coin ended up in green. However, gains aren’t as impressive. To quantify, Ethereum is stable on the last day but up 26% in the previous week. Going forward, bulls must press on. If they do and Ethereum prices expand, participation will also follow suit. So far, it stands at over $46 billion in the past trading day.

Ethereum bulls are upbeat at press time. Excitement is primarily because of the following events:

One researcher thinks that even after the United States SEC approved spot Ethereum ETFs yesterday, the level of “retail Degen” won’t be the same as when spot BTC ETFs launched. Instead, the amendments in the SAB 121 bulletin and the passing of FIT21 represent huge gains for proof-of-stake systems like ETH.
The co-founder of Coinbase also thinks crypto will continue to find tailwinds in the years ahead, primarily because of demographic changes. Old politicians are against the technology, while crypto ownership is mostly concentrated among the young.

Ethereum Price Analysis

[[ETH/USD]] is trading at around new Q2 2024 levels at press time.

Even so, for the uptrend to take shape, $3,700 must hold. Confidence following spot Ethereum ETFs will likely provide the necessary upthrust for the coin.

Yesterday, there was a brief correction below $3,800. Since bulls are in control and bull bars are banding along the upper BB, every low may offer entries for dips, targeting $4,100.

This will only change if there is a sharp drop below $3,700, pushing prices to as low as $3,300—a key support level. This move will invalidate the bullish outlook.

XRP Dips 5%, Will Relisting In New York Rejuvenate Ripple Bulls?

Posted on May 24, 2024 by Dalmas Ngetich

XRP, currently volatile, is under threat from bears pushing prices lower. Technically, sellers hold the reins due to the lack of breakout above $0.55 this week. However, with the coin maintaining its position above the $0.46 and $0.50 zone, there is a glimmer of hope for a resurgence of buyers. For risk-on traders, it may be prudent to wait on the sidelines until a clear trend definition emerges, either in the form of a bullish trend continuation or a drop aligning with the losses of mid-April.

Highlighting the state of XRP and Ripple affairs, the coin is relatively stable. Interestingly, even with the drop and prices moving sideways, the average trading volume shot to over $2 billion in the last trading day. As bears are in control, today’s trend will shape the short- to medium trajectory. A spike above $0.55 will be a welcomed reprieve for upbeat bulls.

The following XRP and Ripple news are worth watching:

In what’s a major boost for XRP trading, Coinbase, one of the world’s largest exchanges, listed the coin for New York residents. The resumption comes after a 9-month break. Still, regulatory clarity, especially on its status, may see more states and countries like Japan permit trading.
The decision by the House of Representatives to pass a bill barring the launch of CBDCs is when Ripple plans to launch a stablecoin. The USDC competitor will deploy on the XRP Ledger, tracking the USD.

XRP Price Analysis

[[XRP/USD]] is trending lower, sinking roughly 5% from this week’s highs.

Traders are nonetheless upbeat.

It is crucial to monitor $0.55 and $0.46 closely. These levels could dictate the future trajectory of price.

A breakout above $0.55 might trigger more demand, rewinding April 13 losses and sparking a lift-off to $0.60 or higher.

Conversely, losses below $0.46 will deflate confidence, possibly accelerating the sell-off to $0.40 in a bear trend continuation pattern.

Lido DAO (LDO) Token Surges Despite Declining Market Share in Ethereum Staking

Posted on May 24, 2024 by Arslan Butt

Lido DAO (LDO), the leading Ethereum (ETH) staking provider, is experiencing a surge in token price despite a decline in its share of the ETH staking market.

DeFi Market Booms, Lido’s Market Share Shrinks

The total value locked (TVL) across DeFi protocols has reached a two-year high of $106.45 billion, reflecting a bullish market trend.

Lido Finance, the largest DeFi protocol by TVL, has seen its own TVL rise 30% since mid-May. However, Lido’s dominance in ETH staking is waning. Its share of staked ETH has dipped to 28.6%, the lowest since April 2022. This coincides with a broader decrease in staked ETH across platforms.

LDO Token Outperforms

LDO price has jumped over 30% in the past week, defying the trend in Lido’s market share. This surge is attributed to increased demand, with the token’s Relative Strength Index (RSI) indicating strong buying pressure.

Whale activity has also spiked, with LDO ranking second among altcoins most purchased by whales in the recent upswing, behind only Ethereum itself.

Security Breach Resolved

A recent security breach involving a Lido Node Operator, Numic, raised concerns about the compromise of validator keys. Lido DAO and Numic swiftly addressed the issue, resetting keys and implementing precautionary measures to prevent financial losses. Transparency and swift action helped maintain community trust.

Bitcoin Price Retreats After Ethereum ETF Approval Buzz

Posted on May 24, 2024 by Arslan Butt

Bitcoin (BTC) price dropped 2.59% on Thursday (May 23rd) to close at $67,953. This decline comes despite a surge in excitement surrounding the US SEC’s approval of the first US spot Ethereum ETF (exchange-traded fund).

Key Factors Influencing Bitcoin Price

US Labor Market and Services PMI: Data releases on these metrics dampened investor enthusiasm for riskier assets, including Bitcoin, by impacting expectations of a September rate cut by the Federal Reserve (Fed).
Ethereum ETF Approval: While the SEC approved the VanEck Ethereum ETF, it hasn’t been greenlit for trading yet. This approval has likely drawn investor attention away from Bitcoin in the short term.
US Bitcoin Spot ETF Market Flow: Despite the overall market decline, data suggests the US Bitcoin spot ETF market likely saw net inflows on Thursday. This indicates continued institutional interest in Bitcoin.

Friday’s Market Watch

FOMC Member Commentary: Statements from FOMC (Federal Open Market Committee) members will be closely monitored for their impact on investor sentiment regarding a potential September Fed rate cut.
US Core Durable Goods Orders and Michigan Consumer Survey: These economic data points could influence investor risk appetite and potentially affect Bitcoin price.
ARK 21Shares Ethereum ETF Deadline: The final decision on this ETF is expected on May 24, potentially sparking further interest in Ethereum.

BTC/USD Technical Analysis:

Bitcoin remains above the 50-day and 200-day EMAs (exponential moving averages), indicating a bullish long-term trend. Breaking above the $69,000 resistance level could propel Bitcoin towards the all-time high of $73,808.

A drop below the $65,000 support level could lead to a further descent towards the 50-day EMA at $64,000. Bitcoin’s 14-Day RSI (Relative Strength Index) reading of 56.74 suggests there’s room for further gains before entering overbought territory.

Overall Market Volatility

The entire cryptocurrency market experienced significant swings on Thursday as traders anticipated the SEC’s decision on Ethereum ETFs. This volatility resulted in over $350 million in liquidations across leveraged crypto derivative positions, highlighting the market’s sensitivity to major regulatory developments.

Green Light for Ether: US Approves Spot Ethereum ETFs in Landmark Decision

Posted on May 24, 2024 by Arslan Butt

The wait is over! In a historic move, the US Securities and Exchange Commission (SEC) has given the green light to spot Ether exchange-traded funds (ETFs). This decision, announced on May 23rd, marks a significant moment for the cryptocurrency industry, potentially paving the way for wider institutional adoption of Ethereum (ETH).

TL;DR

Eight ETF issuers received approval, including major players like BlackRock, Fidelity, and Grayscale.
Trading won’t start immediately. The ETFs still need to pass a separate SEC review (S-1 filing) before trading can begin. This process could take weeks or even months.
Staking is out. Notably, staking functionality was removed from most ETF proposals to address potential regulatory concerns.
Ether’s status as a commodity? Industry experts believe this decision implicitly recognizes Ether as a commodity, not a security. This could have broader implications for other crypto projects.
SEC may target staking services. While Ether itself seems to be off the hook, the SEC might still pursue actions against entities offering staking services for Ether.

Ethereum Price Reacts

The news initially sent the price of Ethereum surging towards $3,940. However, it has since settled around $3,800, suggesting a consolidation phase. Analysts remain optimistic about the near-term outlook for ETH, with potential for further gains in the coming weeks.

A Turning Point for Crypto Regulation?

This SEC decision, coupled with the recent passage of a crypto-friendly bill by the US House of Representatives, suggests a potential shift in the regulatory landscape for cryptocurrencies. With increased clarity and regulations, institutional investors might feel more comfortable entering the crypto market, potentially leading to further growth for Ethereum and the broader industry.

Stay tuned for further developments as the SEC reviews S-1 filings and the first spot Ether ETFs prepare to launch. This is a significant step forward for Ethereum and could have a lasting impact on the future of the cryptocurrency market.