First Mover Asia: Bitcoin Rally Stalls After US Central Bank Chair’s Comments; Ether Rises

The largest cryptocurrency by market capitalization saw three consecutive days of healthy gains end after Jerome Powell signaled that the U.S. Federal Reserve might accelerate the ending of its easy-money policies; ether approaches $4,800 before falling back.

Nov 30, 2021 at 11:30 p.m. UTC
Updated Dec 1, 2021 at 1:25 a.m. UTC

Good morning. Here’s what’s happening this morning:

Market moves: Bitcoin dropped on U.S. Fed Chair Powell’s comment, while ether gained more market share.

Technician’s take: Support levels remain intact, which could establish a tight trading range between $55,000-$60,000 BTC into the Asian trading day.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

Prices

Bitcoin (BTC): $57,157 -1.3%

Ether (ETH): $4,642 +4.4%

Markets

S&P 500: $4,567 -1.9%

Dow Jones Industrial Average: $34,483 -1.8%

Nasdaq: $15,537 -1.5%

Gold: $1,772 -.80%

Market moves

Bitcoin’s price sank after U.S. Federal Reserve Chair Jerome Powell warned Tuesday that the risk of higher inflation has “increased,” signaling the central bank would consider fastening the reduction of its asset purchase policies that have boosted the markets for risky assets.

“A faster Fed taper and increased [interest] rate hike expectations was bad news for bitcoin,” Edward Moya, senior market analyst at foreign-exchange broker Oanda, wrote in a market commentary. “Bitcoin is trading more like a risky asset than an inflation hedge.”

On the other hand, ether, the second-largest cryptocurrency by market capitalization, ended Tuesday with its fourth straight day of gains, trading above $4,600, according to CoinDesk’s data.

“Ethereum is still the favorite crypto bet for most traders and seems like it will make another run towards $5000 once risk appetite returns,” Moya added.

Ether’s growing market dominance is also reflected on the ether-bitcoin (ETH/BTC) chart: The ETH/BTC daily chart on crypto exchange Binance was up by more than 5.2%, at the time of writing, according to TradingView.

ETH/BTC daily chart on Binance (TradingView)

Other layer 1 blockchain-associated tokens also posted gains on Tuesday, led by Terra blockchain’s LUNA token, which logged a new record high price.

Technician’s take

Bitcoin four-hour price chart shows support/resistance levels (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) buyers failed to sustain Monday’s price bounce, although support around $53,000-$55,000 could stabilize the current pullback.

The cryptocurrency is down about 2% over the past 24 hours and is roughly flat over the past week.

The downward-sloping, 100-day moving average on the four-hour chart indicates a short-term downtrend. This means buyers have consistently taken some profit on rallies over the past month.

Recently, the $60,000 resistance level has been a key hurdle for buyers despite oversold readings on the charts. So far, support levels remain intact, which could establish a tight trading range between $55,000-$60,000 into the Asian trading day. BTC was trading around $57,800 at press time.

Important events

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Jibun Bank Manufacturing purchasing managers’ index (Nov.)

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Australia gross domestic product (Q3/YoY/QoQ)

9:45 a.m. HKT/SGT (1:45 a.m. UTC): Caixin China purchasing managers’ index (Nov.)

3 p.m. HKT/SGT (7 a.m. UTC): Germany retail sales (Oct. YoY/MoM)

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

“First Mover” hosts spoke with Blockchain Association Executive Director Kristin Smith as her organization raised $4 million to expand its presence on Capitol Hill. WisdomTree Head of Digital Assets Jason Guthrie shared insights into crypto markets as bitcoin six-month “put-call skew” flipped bearish for the first time since May. Plus, Hedera Hashgraph co-founder and CEO Mance Harmon explained the new partnership with South Korea’s Shihan Bank and multinational Standard Bank on stablecoins.

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DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Muyao is a reporter on the markets team. She is based in Brooklyn, New York. She owns a marginal amount of bitcoin.

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio manager at Cannon Advisors, which does not invest in digital assets. Damanick does not own cryptocurrencies.