Ripple Endorses Harris, Bitcoin ETFs Drop, Stablecoin Surges: Weekly Wrap

London: 9 September 2024 (TraderMade): This week in the world of crypto was a whirlwind of political endorsements, legal battles, and market movements, showcasing both the highs and lows that investors faced.

Ripple’s co-founder made headlines by endorsing Kamala Harris for the US presidency, adding fuel to the already heating political landscape as the US gears up for elections.

Speaking of elections, the US Commodity Futures Trading Commission (CFTC) filed an emergency motion to block prediction market Kalshi from listing election contracts, highlighting the increasing scrutiny on how markets may influence political outcomes.

Key Takeaways

• Ripple co-founder endorses Kamala Harris for the US presidency, and Binance’s compliance head remains detained in Nigeria.
• Bitcoin ETFs saw $211 million in outflows, while stablecoin demand hit $162 billion with increasing institutional adoption.

In the stablecoin world, demand continued to rise as institutional investors pushed the supply to a whopping $162 billion. Meanwhile, Magic Eden’s multi-chain NFT trading volume saw a significant surge, showing resilience in the NFT sector amidst the broader market volatility.

On the downside, US Bitcoin and Ethereum ETFs suffered new lows after a bearish week, with Bitcoin ETFs seeing an outflow of $211 million. Coinbase also faced legal woes, as a shareholder lawsuit over SEC risks threatens the company’s stability.

In more concerning news, Binance’s head of financial compliance has been detained in Nigeria since February in an ongoing dispute with the Nigerian government, with a bail decision expected next month.

Technicals & Macro

BTCUSD

On the technical side, BTCUSD danced around crucial support levels. The ascending channel from October 2023 was key, with prices dipping to 52,550 before rebounding to 55,000. This range-bound movement leaves many traders cautiously optimistic.

Institutional adoption continues to be a driving factor, especially with the stablecoin market cap at $162 billion. Looming US elections and an unpredictable macroeconomic environment may influence the future trajectory of BTCUSD in the upcoming weeks. Traders are keeping an eye on this week’s US CPI and PPI data, which could either signal a Fed rate cut or leave markets scrambling to reprice risk assets.

ETHUSD

ETHUSD approached the 2,100 mark but couldn’t quite hit the target. Despite ETHBTC sitting at multi-year lows, the outlook remains biased toward Bitcoin due to its scarcity value. Staking rewards for Ethereum do offer a slightly better risk-adjusted return, but it still falls short compared to BTC's broader structural advantages heading into the year’s end.

Spot Desk Insights

The Australian dollar retreated against the USD last week, buoyed by weak US jobs data. Flow in the majors was balanced, though there was a buy skew towards SOL. Altcoins struggled, unable to mount any meaningful recovery.

The upcoming mid-week CPI release is expected to be a major market mover, especially as the Fed mulls its first rate cut decision. Derivatives DeskOptions markets are already pricing in significant volatility ahead of the US election, particularly with the possibility of a Trump win, which is seen as bullish for crypto.

Investors may look to capitalize on this election premium through discount notes, allowing for upside option premiums or discounted BTC purchases depending on the market's movement.

What to Watch This Week

As we head into another week of volatility, all eyes will be on macro data points.

• Chinese CPI and PPI figures arrive on Monday, followed by the UK’s unemployment rate and average earnings data on Tuesday.
• Wednesday will see the much-anticipated US CPI release, while Thursday brings the US PPI and unemployment rate figures.
• These economic reports will likely set the tone for crypto markets as they brace for the Fed's next move.

Final Thoughts

The crypto market remains in flux, with major events like the US election and economic data releases shaping the landscape. Investors are advised to tread carefully, especially with the increasing volatility surrounding key macroeconomic events. As always, stay informed and keep an eye on key levels to navigate these choppy waters.