Stocks & Crypto Correlation
Yesterday’s Market Moves
BTC
S&P
WTI
21,047.60 |
+ 1.56%
3,900.11 |
- 0.30%
111.29 |
+ 1.57%
As macroeconomic indicators have slowed down, bulls and bears have been jostling over the next direction of your favourite assets. However, correlation with traditional equities and technical signs are giving us clues for the fate of crypto this week.
Read the full issue to find out
Market's Response

Yesterday, a bearish morning saw the crypto market fall to a mid-day low of $872.4 billion. Today, the crypto market has rallied to a high of $936.06 billion and its trading volume is up 39.41% to $46.29 billion, at the time of writing.

Over 24 hours, total liquidations jumped as investors got caught out by a breakout crypto session. At the time of writing, 24-hour liquidations stood at $81.39 million, up from $22.82 million on Sunday morning.

Equity markets closed last week with a rare upswing, with the tech-focused Nasdaq and S&P 500 rising 2.3%, respectively on Friday, and the Dow Jones Industrial Average (DJIA) climbing 2.4%, despite a declining yen and ongoing political turmoil in the U.K.

US Treasury Secretary and former Fed Chair Janet Yellen recently looked to ease market stress over inflation, saying there was no evidence of inflation becoming embedded in the US economy - a sentiment shared by FOMC members. This eased bets of a 75-basis point rate hike in December and looks set to deliver a three-day winning streak for the crypto market, the longest since mid-September.

What you need to know

Last week’s late rebound will face a test this week as nearly one-third of listed companies in the S&P 500 will announce earnings. If the U.S. really is at the beginning of a recession, missed earnings will be an early warning sign that will shake the markets.d

Economic data could deliver policy uncertainty with the FOMC in its blackout period until November 3. Upbeat headline and sub-component numbers could refuel expectations of a 75-basis point hike in December, and affect crypto prices.

Today, investors are paying attention to Q3 GDP numbers from China and US PMI figures for October. We also expect the NASDAQ 100 Mini to set the tone this week, and continue its correlation with the crypto market.

The slide in expectations of a hawkish December move suggests a bullish start to the week, though the markets will need to navigate the stats from China

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Bitcoin

Bitcoin spent the weekend in familiar territory, hovering comfortably over $19,000.

The largest cryptocurrency was recently trading at $19,625, up 2.23% over the last 24 hours and toward the bottom of the narrow range it has occupied for much of the last five weeks.

During the week, bears were selling on this brief rally and retesting the $18,850 support level - thereby weakening this support. To counter the bears, bulls will have to push and sustain the price above the longstanding $19,000 mark. If that happens, the bullish momentum could pick up, and the pair could rally to $22,799. The bears may pose a strong challenge at this level.

What you should know

The last few days saw old Bitcoins being deposited on cryptocurrency exchanges—specifically coins from the age categories of 2-3 years and 3-5 years. Such a movement generally results in negative short-term price action.

At the moment, Bitcoin’s price trajectory now seems largely dependent on the S&P 500’s behaviour. Bitcoin investors from the aforementioned age group expect a further drop in the S&P 500. According to fractal analysis, the stock market could expect two more big sell-offs on Nov. 22, 2022, and Dec. 23, 2022, as per CryptoQuant

Whether another drop in price follows is something that is yet to be seen. For now, the next Bitcoin price resistance is found at the $19,600 mark. The $19,000 level is acting as the next key support.

In Other News,
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Ethereum

Ethereum (ETH) is trading at $1,347, up more than 2% in the last 24 hours. With a 24-hour trading volume of $11 billion, it retains its #2 rank, with a live market cap of $164 billion.

On the technical front, the major resistance levels for Ethereum remain at $1,360 and $1,384, while bullish bias remains strong at over $1,340 today. However, Investors remain nervous about inflation and macroeconomic uncertainty that threatens to cast the global economy into a steep recession.

Ethereum staking rewards have not been something to look forward to, despite the 6% increase since the Merge. According to Messari, ETH inflation had fallen to almost zero, which had affected the possibilities of increased rewards.

However, that was not the only reason. The crypto intelligence platform further noted that the underperforming Maximum Extractable Value (MEV)-boost also contributed to the decline. This was because the MEV enabled validators to earn high rewards. In turn, helping stakers to gain more value.

In Other News,
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Altcoins

The top altcoin performers in the last 24 hours are Klaytn (KLAY), followed by Polygon (MATIC), and TerraClassicUSD (USTC). Klaytn (KLAY), which is the token for the Klaytyn metaverse blockchain, is up more than 25% to $0.18, while MATIC is up more than 6% to $0.88. At the same time, USTC has surged more than 6% in the last 24 hours.

In the last 24 hours, the price of The Chain (XCN) has dropped by more than 3% to $0.05. The price of Axie Infinity (AXS) has dropped more than 2% to around $8.6. Terra's LUNA is down 1.1% and Dogecoin knockoff SHIB is down 0.5%.

Decentraland's MANA token opened the week down 0.9% as the platform struggles with a userbase that's not proportional to its market cap.

In Other News,
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Quiz Answer
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