Weekly Crypto Market Wrap: Crypto Markets Surge as MicroStrategy Buys Big

London: 16 September 2024 (TraderMade): This week in the crypto market was marked by major institutional moves, regulatory developments, and macroeconomic influences.

MicroStrategy made headlines with its largest Bitcoin purchase since 2021, acquiring 18.3K BTC for $1.1 billion, leading to an 8% surge in its stock. Meanwhile, US spot Bitcoin ETFs recorded the highest daily inflows in nearly two months as Bitcoin briefly topped the $60,000 mark.

The potential for a 50 basis point cut by the US Federal Reserve this week has the market on edge, while other financial instruments, like stocks, bonds, and gold, have rallied amid monetary easing.

Key Takeaways

• MicroStrategy's $1.1B BTC purchase boosted market sentiment.
• Bitcoin flirts with $60,000 as the Fed prepares for possible rate cuts.

Major Developments

• MicroStrategy's Massive BTC Buy: MicroStrategy's bold purchase has solidified its position as a Bitcoin advocate. The company's most significant move since 2021 has helped buoy Bitcoin prices, although the market still shows signs of volatility.
• US Spot Bitcoin ETFs: Bitcoin ETFs in the US saw record inflows, reflecting growing investor confidence in the asset as it hovers near the $60,000 level. This influx is attributed to changing macroeconomic conditions, including the potential interest rate cuts by the Federal Reserve.
• Regulatory Landscape: Tether strengthened its regulatory stance by onboarding PayPal's former head of government affairs. Meanwhile, the English court ruled that Tether is personal property, a landmark decision in the ongoing regulatory debates around cryptocurrencies. Hong Kong's potential licensing regime for OTC crypto trading also grabbed attention, indicating a push towards more structured markets.
• Market Sentiment: The S&P and Nasdaq neared all-time highs, and gold hit an all-time high, underscoring a broad market rally. Bitcoin's underperformance compared to equities raises questions about its short-term trajectory, especially with political uncertainties like the upcoming US presidential election. The crypto market's response to these events remains cautious, with BTC forming a descending wedge pattern on the daily chart, indicating indecision.

Technical Analysis

BTC/USD Key Levels

Favorable inflation data and shifts in Fed Funds Futures fueled Bitcoin's rally to $60,000. However, its direction remains uncertain until closer to the election. A break above the descending wedge could signal a move towards $65,000, while a downside target is $53,000.

• Support: $53,000
• Resistance: $65,000

ETH/USD Key Levels

Ethereum lags behind Bitcoin, with ETH/BTC reaching multi-year lows. Despite this underperformance, the fundamentals still favor Bitcoin, leading to a short bias on ETH. However, the extent of this bias is tempered due to Ethereum's significant price movement in the short term.

• Support: $2,100
• Resistance: $4,000

Market Dynamics

• Spot Market: The Australian dollar (AUD) exhibited significant volatility, affected by global stock market recovery and anticipation of the FOMC meeting. Bitcoin and Solana saw moderate interest, while altcoins continue to be sidelined. The upcoming Fed rate cut decision is expected to introduce further market volatility.
• Derivatives Market: Basis rates remained steady, with BTC's 90-day annualized rate at 7.25% and ETH's at 5.29%. The FOMC interest rate decision creates a kink in the front end of the term structure, leading some investors to consider selling volatility to capture yield premiums.

What to Watch: Economic Indicators

• Canadian CPI and Retail Sales figures on Tuesday.
• UK CPI and PPI figures on Wednesday.
• US Fed Fund Rates, Unemployment Rates, FOMC Economic Projections, and Press Conference on Thursday.
• Australian Unemployment Rate and Employment change rates on Thursday.
• UK Monetary Policy Summary and Interest Rates on Thursday.
• Japanese Interest Rates on Thursday.

The market is set for a volatile week, with the Fed's rate decision and global economic indicators likely influencing crypto prices. Watch closely for the direction of Bitcoin as it navigates the current macroeconomic landscape and political uncertainties.