Weekly Crypto Market Wrap: Bitcoin Holds Strong Amid Market Turbulence

London: 4 September 2024 (TraderMade): The crypto market this week saw Nasdaq pushing for SEC approval on Bitcoin index options, Coinbase's BASE blockchain hitting 1 million daily active addresses, and MakerDAO rebranding to Sky.

These developments highlight the growing institutional interest, DeFi expansion, and global crypto adoption.

Key Takeaways

• Nasdaq seeks SEC approval for Bitcoin index options, potentially expanding institutional crypto investments.
• Coinbase's BASE blockchain surpasses 1 million daily active addresses, showcasing DeFi's growing adoption.
• MakerDAO rebrands to Sky, introducing the USDS stablecoin in a fresh phase of DeFi innovation.
• Argentina integrates Ethereum blockchain education into high school curriculums, preparing future blockchain developers.

SEC Approval

A significant move in institutional crypto, Nasdaq is now seeking approval from the SEC to offer Bitcoin index options. If approved, this would open up new avenues for institutional investors looking to hedge their positions or take advantage of crypto volatility without holding physical Bitcoin.

With the SEC still wary of approving direct Bitcoin ETFs, index options may provide a workaround that could be a game changer for Bitcoin derivatives markets.

Coinbase's BASE Blockchain

Coinbase's BASE blockchain has hit a milestone, surpassing 1 million daily active addresses. BASE has been a key player in bringing decentralized finance (DeFi) into the mainstream.

Its rapid growth shows the increasing appetite for blockchain-based applications bolstered by Coinbase's large user base and integration with the broader crypto ecosystem.

MakerDAO Rebrands to Sky

MakerDAO, a stalwart in the DeFi space, has undergone a major rebranding, now known as Sky. In addition, Sky has announced the launch of a new stablecoin, USDS, further cementing its place in the crypto-finance world. The move is aimed at refreshing the project's identity as it enters a new growth phase.

Blockchain Education

Argentina is pioneering blockchain education, becoming the first country to introduce Ethereum blockchain courses into its high school curriculum. This initiative aims to equip students with the skills necessary for future jobs in the crypto and blockchain sectors.

Ethereum's smart contract capabilities are particularly highlighted, encouraging students to explore decentralized applications.

X Goes Offline

Brazil has become the 6th country to lose access to X (formerly Twitter) after a standoff with the Brazilian Supreme Court. Local users now face a daily fine of $9,000 if caught accessing the platform via VPN.

The court's demands centred on controversial censorship laws, raising further debate about free speech and state control in the country.

Mark Zuckerberg

In a major revelation, Meta CEO Mark Zuckerberg stated that the White House had pressured Facebook to censor content related to Covid-19 and Hunter Biden. This statement has sparked heated debates over government intervention in social media platforms and the boundaries of censorship in digital spaces.

Telegram CEO on Bail

Telegram CEO Pavel Durov has been released after posting a $5.56 million bail. Meanwhile, the TON blockchain, associated with Telegram, faced outages following the launch of the DOGS meme coin.

The outages have raised concerns over the robustness of the TON ecosystem, especially with its increasing integration into Telegram's core offerings.

US Consumer Sentiment

In positive macroeconomic news, US consumer sentiment ticked upwards for the first time in five months. This data comes just ahead of the Federal Reserve's decision on whether to cut interest rates, with markets expecting either a 25 or 50 basis point cut.

Technicals & Macro

BTCUSD

Last week's bullish forecast for Bitcoin fell flat as unexpected market events steered the crypto market lower. In contrast to the optimism, BTC saw selling pressure, particularly during the US sessions, reflecting a pattern of accumulation in Asia and liquidation stateside.

Altcoins struggled even more, with AI-related projects bearing the brunt. BTC continues to outperform the broader altcoin market, as on-chain data suggests a bullish case—over 75% of BTC hasn't moved in the last six months.

This long-term holding behavior could signal a supply shortage that may push prices higher in the coming months. Despite crypto's downturn, equities fared well, with the S&P500 remaining flat and the Nasdaq down only 0.5% for the week.

However, sentiment in the crypto market is tied to Mt. Gox creditor distributions and concerns around the US election, where Kamala Harris has taken a slight lead. Harris's stance on crypto remains unclear, but market sentiment leans cautious given the Democrats' regulatory approach.

Technically, BTC faces support near $55,000, with a break lower targeting $53,000. The upcoming non-farm payroll (NFP) report could add volatility, especially with the Federal Reserve's rate cut decision looming.

Key Levels: 53,000 / 55,000 / 66,000 / 72,000 / 73,794 (ATH!)

ETHUSD

ETH continues to look weak against BTC, with bearish sentiment prevailing. A breakdown could see ETH targeting $2,100, while a rally could push it toward $3,200.

However, the price action remains heavy, suggesting that ETH will need a catalyst like positive macroeconomic data or bullish sentiment in BTC to spark any meaningful upside.

Key Levels: 2,100 / 2,800 / 3,600 / 4,000

Spot Desk Recap

AUD remained strong throughout the week, and a slight dip in Tether saw a decrease in local crypto off-ramping. BTC's 5% drop at the start of the week caused volatility to slow, with clients cautiously positioned as the weekend approached.

BTC, ETH, and SOL continued to dominate trades, while RWAs such as OM saw renewed interest. The desk is strategically offering stablecoin and fiat pairs with T+0 settlement, keeping corporate and exchange clients interested in rapid liquidity.

Derivatives Desk

Basis rates on BTC and ETH have decreased, with BTC's 90-day annualized rate now at 7.9% and ETH trailing at 6.6%. Short-term options traders are buying protection, pushing volatility up. This creates an opportunity to consider collaring BTC and ETH holdings to hedge against downside risks.

What to Watch

• Tuesday: US ISM manufacturing PMI
• Wednesday: Bank of Canada rate statement, US JOLTS job openings
• Friday: US unemployment rate

Conclusion

Despite some market volatility, crypto continues to show resilience. With institutional moves, technological milestones, and educational initiatives like Argentina's blockchain curriculum, the sector remains poised for further growth and innovation.