First Mover Asia: Government’s COVID-19 Quarantine Threatens Taipei Blockchain Week; Bitcoin Rebounds Above $20,000
The organizers of Taipei Blockchain Week are exploring the use of residency visas for potential attendees and are optimistic about holding a successful event; the price of ether rises to approximately $1,500.
After a brief drop on Sunday, bitcoin regained its new support level above $20,000 on Monday.
The largest cryptocurrency by market capitalization recently traded at approximately $21,250, an increase of approximately 3% over the previous 24 hours. BTC’s resiliency provided a sliver of reassurance to investors who believed the cryptocurrency’s drop to $19,500 was a precursor to a larger decline resulting from Fed Chair Jerome Powell’s pledge to maintain the U.S. central bank’s hawkish monetary stance.
“Macro has been in the driver’s seat all year, and the market has been reminded this week and after Jackson Hole that the same inflationary headwinds with strong job markets persist,” said Luke Farrell, a cryptocurrency trader for crypto grading firm GSR, “You’re seeing a bit of a reassessment of the optimism that followed the CPI print last month, as well as a bit of oversold conditions that began in June,” the analyst said.
Recently, Ether returned to its pattern of outperforming bitcoin, gaining over 7%. ETH is currently trading well above $1,500 after falling significantly below this psychologically significant level over the weekend. In the past few months, the second largest cryptocurrency by market capitalization has risen more rapidly than BTC as the Ethereum blockchain approaches the Merge, which will change the protocol from proof of work to more energy-efficient proof of stake.
The majority of other altcoins in the top 20 by market cap were in the green, with ATOM and LRC recently increasing by 12% and 8%, respectively. AVAX rose more than 5%, regaining ground lost after a self-described “whistle blower” website accused Ava Labs, the company behind the Avalanche, layer1 blockchain, of paying lawyers to harm competitors and evade regulators. On Monday, the CEO of Ava Labs, Emin Gün Sirer, denied the company’s involvement in a smear campaign.
The tech-focused Nasdaq and S&P 500 indexes lost 1% and 0.7%, respectively, on the equity markets. As nervous investors sold government bonds, Treasury yields increased. On Tuesday, the Conference Board will release its monthly consumer confidence index, a widely followed indicator of economic sentiment. In the group’s most recent report, released in July, confidence was declining, albeit at a slower rate than in June, when inflation reached 9.1%.
In one of the weekly fund flows report, noted $46 million in outflows for the third consecutive week. According to the report, bitcoin outflows of $29 million comprised the largest portion of this amount. “Our most recent fund flows report can be summarised in two words: investor apathy. There are no near-term catalysts, and so we wait “Chief Strategy Officer of CoinShares, Meltem Demirors, tweeted.
Farrell of GSR stated that volatility should remain “heightened” in the near future as markets await next month’s release of the Consumer Price Index (CPI), the Merge, and the next meeting of the Federal Open Market Committee, which appears likely to result in another 75 basis point interest rate hike. “The market will soon be faced with a variety of incoming data points, which will likely increase volatility in the short term,” he said.