Good morning Here’s what happens:
Prices: The post-debt-ceiling rally in the crypto market has come to an end, with bitcoin and ether declining in East Asia. What’s the next narrative for crypto?
Insights: The latest Commitment of Traders reports show a rebound in long open positions at money managers.
Looking for the next price story
Yesterday’s rally after the debt ceiling is over.
Bitcoin starts the East Asia trading day down 1.3% at $27,746, while Ether is down 1.1% at $1,893.
In the past few weeks, Krypto has been struggling with a narrative issue. The lack of a defining narrative – is it a risk value or a hedge against risk? – has led to patternless price swings and confused investors.
For example, some might say that Bitcoin should have surged due to uncertainty about the debt ceiling as a US default would have rattled the traditional financial system. Instead, Bitcoin behaved like a stock. Perhaps the narrative of crypto isn’t a narrative at all.
Ed Moya, senior market analyst at forex market maker OANDA, reckons the upcoming US election is the narrative to watch.
“We have been reminded that the key to Bitcoin’s success in the US may depend on the upcoming presidential election,” Moya wrote in a note on Friday. “Florida Gov. Ron Desantis announced his intention to run for President and appears poised to ‘protect’ Bitcoin.” ”
With central bank digital currencies being a new hot topic in the Florida political landscape, the national level is the next logical step. Cryptocurrencies have become an issue in elections around the world, such as in South Korea and Thailand, and President Joe Biden mentioned them when discussing the debt deal negotiations.
Perhaps this is the narrative to watch?
Funding rates in the crypto markets remain positive
The Commitment of Traders report shows that money managers increased their open long positions in bitcoin after falling in the previous two weeks. The increase of 24 contracts follows a drop of 162 contracts the week before.
The increase stops what appeared to be an overall reduction in engagement rather than a comment on the price itself. Money managers also reduced their short positions by a total of 194 contracts over the same period.
The Commodity Futures Trading Commission (CFTC) releases weekly COT data detailing open interest and activity by asset managers, leveraged funds, and dealer intermediaries in bitcoin futures.
Money managers now account for 48.9% of open long positions on the Chicago Mercantile Exchange and as a group are 97.25% long the asset.
The Hash hosts weighed in on the biggest stories shaping the crypto industry today. Ether (ETH) counts on exchanges have hit a low not seen since July 2016 as staking eats up available ether. Regardless, the potential sign that good economic news equals bad news for digital asset price narratives is beginning to shift. Additionally, attorney for some FTX investors, Adam Moskowitz, joined The Hash to discuss serving basketball legend Shaquille O’Neal in a class action lawsuit regarding FTX and its celebrity endorsement.