First Mover Americas: Bitcoin May Not Be out of the Woods Yet; Stablecoins' Bull Market Continues

The latest moves in crypto markets in context for Feb. 23, 2022.

AccessTimeIconFeb 23, 2022 at 1:53 p.m. UTC
Updated May 11, 2023 at 7:16 p.m. UTC
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Good morning, and welcome to First Mover, our daily newsletter putting the latest moves in crypto markets in context. Sign up here to get it in your inbox each weekday morning.

Here’s what’s happening this morning:

  • Market Moves: Terra's LUNA leads recovery in the crypto market.
  • Featured stories: Bitcoin may not be out of the woods yet, derivatives data indicate. Stablecoin supply continues to rise.

And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. Today's show will feature guests:

  • Marc LoPresti, managing director, The Strategic Funds
  • Michael Chobanian, founder, KUNA Exchange

Market Moves

By Omkar Godbole

Bitcoin was better bid while heading into the American trading hours, with traditional markets pointing to continued risk reset. At press time, the Aussie dollar and the New Zealand dollar were trading higher against the greenback, and the futures tied to the S&P 500 pointed to a positive open with a 0.4% gain.

"The market appears to be judging the initial salvo of sanctions against Russia for formally recognizing the separatist regions in Ukraine as modest at best and has preceded to take on more risk," Bannockburn Global Forex's Marc Chandler said in a blog post.

Terra's LUNA token, Cardano's ADA and Avalanche's AVAX led the recovery in the broader crypto market with double-digit gains on a 24-hour basis. LUNA's strength perhaps stemmed from Singapore-based nonprofit organization Luna Foundation Guard's (LFG) decision to create a bitcoin-denominated reserve as an additional layer of security for UST – Terra's decentralized stablecoin.

LDO, the governance token of liquid staking protocol Lido, dipped to $1.60, trimming Tuesday's 37% spike from $1.36 to $1.87 despite continued inflows into the protocol. "Yesterday, someone staked 28,000 ETH ($75m) with Lido in a single transaction. That's the 5th largest staking transaction into Lido so far. And today, another 22,500 ETH was staked (7th largest)," analytics firm Nansen's CEO Alex Svanevik tweeted.

Latest Headlines

Bitcoin May Not Be out of the Woods Yet

By Omkar Godbole

While bitcoin is trading higher for the second day, it may be too early to call a bottom as the derivatives market continues to reflect pessimism, and the cryptocurrency is yet to take out a key technical hurdle.

The annualized rolling three-month futures premium continues to trend south in major exchanges, including the Chicago Mercantile Exchange (CME) and Binance, indicating pessimism among both institutional and retail traders.

The CME futures traded at a premium of 2% at press time, while offshore futures traded at a premium of over 3%, according to data provided by Skew.

"The futures basis still experience a steady decline as the bears show no signs of stopping," Arcane Research said in a weekly note published Tuesday. Basis refers to the spread between prices in futures and spot markets.

Bitcoin futures premium continues to trend south. (Chart by Skew)
Bitcoin futures premium continues to trend south. (Chart by Skew)

The options market continued to show a put bias with one-, three- and six-month put-call skews returning positive values. A put option gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. A put buyer is implicitly bearish on the market.

From a technical analysis perspective, $44,000 appears to be the resistance to beat for the bitcoin bulls. The cryptocurrency recently failed to establish a foothold above that level, as evident from the long upper wicks attached to the previous two weekly candles.

Bitcoin's weekly price chart. (Chart by TradingView)
Bitcoin's weekly price chart. (Chart by TradingView)

Bull Market in Stablecoins

By Omkar Godbole

The supply of stablecoins or cryptocurrencies with values pegged to external references like the U.S. dollar continues to grow even as the broader crypto market remains depressed.

Coingecko data shows the market capitalization of stablecoins has risen above $180 billion, marking a 32% jump from the tally of $141 billion observed before the crypto market peaked in mid-November.

"Tether (USDT) is the biggest stablecoin with a 44% market share, followed by USD Coin (USDC) with 29%, and Binance USD (BUSD) with 20%. USDC grew extremely fast in 2021 and has continued its strong growth in 2022 with a 20% growth," Arcane Research noted. "Since the summer of 2021, USDT's growth has stagnated, and it has only grown 1% so far in 2022."

The popular narrative says that the surge in stablecoin supply represents "dry powder," which can be used to snap up cryptocurrencies at cheap prices.

However, that's not necessarily true, and investors could be simply seeking refuge in the stablecoins offering protection from market volatility.

Besides, prospects of higher interest rates in the U.S. could be powering demand for these dollar-pegged currencies.



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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Parikshit Mishra

Parikshit Mishra is CoinDesk's Deputy Managing Editor responsible for breaking news coverage. He does not have any crypto holdings.


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