Daily News | Crypto Markets Optimistic as Derivatives Soar, BlackRock CEO Positive; Israeli Parliament Boosts Crypto Tax, Fed's Hawkish Impact
Crypto Daily Digest: Bitcoin Stable as BlackRock CEO Welcomes Crypto Revolution and Israeli Parliament Advances Crypto Tax Benefits
Bitcoin maintained stability at $30,000 during early Wednesday trading, showcasing resilience despite 12 consecutive days of range-bound trading following a significant 22% price surge in mid-June. However, Optimism prevailed in the derivatives markets, with futures open interest exceeding $12 billion and positive funding rates persisting for 29 consecutive days.
BTC futures open interest reached 1-year high - Data per Coinglass
Despite a temporary dip in BTC’s price and its Relative Strength Index (RSI) falling below 30 during the opening of U.S. markets, the overall sentiment among traders remained bullish. Short-term traders seized the opportunity to purchase BTC at a favorable valuation, while long-term investors uated the RSI on the daily chart, where it stood at 62.
BTC daily RSI fell to 62 - Data per Tradingview
In another development, dYdX, a prominent crypto exchange, took a significant step towards decentralization with the launch of its public testnet for the upcoming “v4” version. Currently operating on Ethereum and StarkEx networks, dYdX features a centralized order book and matching engine. However, the new iteration aims to eliminate these centralized components and achieve full decentralization without relying on automated market makers like Uniswap. The testnet allows users to experiment with virtual trades and basic exchange functions, paving the way for future bridging between networks. Upon completion of the testnet phase, dYdX plans to integrate stablecoins and Cosmos Inter-Blockchain Communication support, marking the final milestone before the official launch of v4.
Meanwhile, BlackRock CEO Larry Fink, who had previously expressed skepticism towards cryptocurrencies, shared a positive outlook on their potential to revolutionize the financial . Fink highlighted the significance of tokenization, noting that it could transform the finance industry. He specifically mentioned Bitcoin as an international alternative asset that could serve as a hedge against inflation and currency duation. BlackRock’s iShares unit has recently filed for a spot Bitcoin exchange-traded fund, indicating the company’s growing interest in the crypto space. However, Fink couldn’t provide an estimated timeline for regulatory approval. Despite his bullish stance, Bitcoin’s price remained relatively stable, hovering just below the $30,500 mark.
In another part of the world, the Israeli parliament, known as the Knesset, made progress towards extending tax benefits currently available to high-tech firms to the crypto sector. The proposed bill, which passed a preliminary reading, aims to exempt foreign residents from capital gains taxes on digital currency sales. Additionally, it seeks to reduce the tax rate on crypto options for employees, similar to stock options, from 50% to approximately 25%. The bill enjoys support from the coalition government led by Prime Minister Benjamin Netanyahu, aligning with their economic policies aimed at attracting investors and companies to Israel. This move reflects Israel’s ongoing efforts to integrate and regulate the crypto industry, with proposed guidelines for digital asset treatment and stablecoin requirements. Embracing cryptocurrencies is seen as an opportunity for Israel to compete with global financial centers like London and New York.
Bitcoin (BTC) $30,626 (+0.04%) - Neutral Outlook
Building on our previous analysis, the decrease in trading volume accompanying the decline in price suggests a decline in the demand for Bitcoin (BTC) at its current price level. Nevertheless, it is possible that we may witness one final upward movement, pushing the price towards the 4-hour Uptrust Action (UA) zone spanning from 31257 to 31377. This surge could serve as a retest before we expect the price to reach our projected target of 29300.
Overview:
- Closest daily support zone: 30025 - 29475
- Closest daily resistance zone: 30690 - 31015
- Key Level: 28420 (Weekly High Between Dec. 21-28, 2020)
Daily Resistance zones
- 30690 - 31015
- 31530 - 32255
- 33100 - 33600
Daily Support zones
- 30025 - 29475
- 29095 - 28420
- 27970 - 27265
Learn more: Market News | Daily Main Token Trends Overview
Macro: Dollar Strengthens, Gold Slides; Fed’s Hawkish Outlook Shakes Global Markets
Global markets experienced mixed sentiments as traders digested the latest meeting minutes from the Federal Reserve. The US Treasury yields rose while stocks faced declines, influenced by the hawkish signals revealed in the minutes. The S&P 500 closed down 0.2%, reflecting investor concerns over potential rate hikes.
The rise in yields on two-year and 10-year Treasuries resulted in an inverted yield curve, a potential indicator of an impending economic downturn. Although the Federal Reserve surprised Wall Street by pausing its rate-hiking cycle, it still intends to implement two more rate increases this year. The minutes highlighted divisions within the Federal Open Market Committee, with some members favoring another rate hike due to a tight labor market.
The upcoming June employment report holds significant importance for investors as it may shape the debate on whether the Fed will proceed with rate hikes or opt for a pause in September. Swaps traders have yet to fully price in the expected rate hikes, but bets on the Fed easing its tightening policy have been pushed further into the future.
Currency markets witnessed the US dollar strengthening against major counterparts, while gold prices faced a decline. Crude oil prices reached $72 per barrel following output cuts by Saudi Arabia and Russia.
Asian markets are expected to experience declines, mirroring the lower closing of Wall Street in response to the Fed’s hawkish signals. Equity futures for Japan, Australia, and Hong Kong fell, emphasizing investor apprehension. Additionally, markets will closely monitor Treasury Secretary Janet Yellen’s visit to Beijing in an effort to mend relations between the US and China.
Meanwhile, China’s central bank-backed news outlet stated that the country possesses the necessary tools to stabilize the foreign exchange market, even in the event of a weakening yuan. China’s largest banks also reduced corporate US dollar deposit rates, aiming to support the struggling yuan.
As global markets navigate potential rate hikes, investors await crucial US employment reports to gain insights into the state of the labor market. The outcome of these reports is likely to impact market volatility and shape expectations regarding the Fed’s future actions.
