First Mover Americas: Bitcoin’s Bear Cross Is Bullish and a Big June Jobs Beat

The latest moves in crypto markets in context for July 8, 2022.

AccessTimeIconJul 8, 2022 at 1:44 p.m. UTC
Updated May 11, 2023 at 6:20 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.

  • Price Point: BTC is trading up on the day as short liquidations get washed out, triggering buy orders. Traditional markets react to the news of the death o former Japan Prime Minister Shinzo Abe.
  • Market Moves: Omkar Godble looks at the bearish but historically contrarian "bear cross" indicator, which suggests an end to the market decline and a bullish revival ahead.
  • JUST IN: The U.S. jobs report for June showed a gain of 372,000 in nonfarm payrolls, exceeding economists’ estimates for a 275,000 increase. The report might suggest that the Federal Reserve will have little choice but to raise the benchmark U.S. interest rate by an 0.75 percentage point at a meeting later this month to keep the economy from getting too hot. Bitcoin was trading about 1% lower in the minutes after the release of the report. (Check CoinDesk for updates.)

Price point

Bitcoin (BTC) traded above $21,500 for the first time in a week. The world’s largest cryptocurrency by market capitalization was up 4.5% on the day after dipping to a low of $19,300 earlier this week.

U.S. stock futures slid and European equities were lower as the news broke that Abe, Japan’s former longest serving prime minister known for his "Abenomics" policy, was shot while making a campaign speech in Nara, Japan.

Ether (ETH) was up 2.5% to about $1,211. ETH started the week off at lows of about $1,000 and has climbed since then.

Seven-day ETH price chart. (CoinDesk)
Seven-day ETH price chart. (CoinDesk)

The correlation between cryptocurrencies and other risky assets continues to strengthen as the global macro environment appears to be driving prices.

Fabio Ackeret, a sales trader at Crypto Finance AG, said he doesn't see a breakout in the crypto market anytime soon.

“To see crypto breaking out on the upside, the dust of all recent events needs to settle (UST, Celsius, 3AC),” Ackeret wrote in a note on Friday, referring to the collapse in the price of Terra's UST stablecoin and the woes at crypto lender Celsius Network and hedge fund Three Arrows Capital.

The correlation between BTC and S&P500 (TradingView)
The correlation between BTC and S&P500 (TradingView)

Meanwhile, as bitcoin's price goes up, the shares of publicly traded crypto miners rose 9.6% between Wednesday and Thursday, according to data from CoinDesk.

In other news, Celsius deposited $500 million in wrapped bitcoin (WBTC), a bitcoin derivative product of the Ethereum blockchain, to crypto exchange FTX just hours after Celsius repaid its debt to the decentralized lending protocol Maker and reclaimed $450 million of collateral in WBTC.

Moon Tech Spain, the Spanish subsidiary of trading platform Binance, has been granted registration as a virtual asset services provider by Spain's central bank.

In Latin America, Bitso, announced on Thursday it has launched a cryptocurrency remittance service in Colombia. The service – which will allow individuals and businesses to send and receive digital dollars – is the first crypto remittance product in Colombia to date, according to Bitso.

Remittances totaling $8.56 billion were sent to Colombia from abroad in 2021, an all-time record, El Tiempo newspaper reported.

Compass Mining has laid off 15% of its employees and cut executive compensation to ride out the crypto downturn. The bitcoin mining company said it's reassessing its priorities after growing too quickly.


Market moves

By Omkar Godbole

Bitcoin 'Bear Cross' Raises Outlook for Bull Revival

Yes, you read the title right. An impending bearish crossover, a technical pattern theoretically suggesting continued weakness in the bitcoin price, could be a trap for sellers and portend a bullish revival.

A three-day-candlestick chart shows the simple moving average (SMA) of the past 100 candlesticks is on the verge of crossing below the 200-candle SMA, confirming the first bearish crossover of the two averages since December 2018.

Historically, the crossover has marked an end of bear markets and paved the way for notable bull runs.

The averages crossed bearishly in December 2018, trapping sellers on the wrong side of the market. Bitcoin hit a bottom of about $3,200 and spent the following three months building a base for a rally. The cryptocurrency hit a high of $13,800 by the end of June 2019.

The bear cross of February 2015 coincided with peak selling, and bitcoin began a multiyear bull run seven months later. The first bear cross, dated June 2012, also trapped sellers on the wrong side of the market.

Crossovers between longer duration moving averages are known to be contrary indicators because they are based on past data and tend to lag prices. The market is often battered, oversold and overdue for a reversal higher by the time the crossover is confirmed.

Past performance is not a guarantee of future results. That said, history could repeat itself because the Fed's hawkishness, or anti-stimulus stance, appears to have peaked and traders are now pricing interest rate cuts for 2023.


Latest headlines

This web version of today's First Mover newsletter was produced by Sage D. Young.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

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 offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.