Crypto Market Update

CPI came in slightly above market expectations, primarily driven by persistent shelter costs, though these were partially offset by deflationary energy prices. As a result, rate cut expectations for next week’s FOMC meeting have dropped to 25 basis points. Following the CPI release, crypto markets, along with other risk assets, initially sold off as the market digested the data. However, prices have since rebounded, with BTC -1.55% trading just above $57k, ETH -2.66% around $2,350, and SOL -1.97% holding above the $130 level. Among the top 50, AAVE -5.22% , UNI -0.96% , and ICP -0.48% have been the strongest performers in the past 24 hours. On the equities side, the  QQQ -1.45%  has turned positive on the day, and the ^SPX -1.36%  is almost unchanged, led by the rebound in tech stocks. Meanwhile, yields have bounced for the first time in over a week, with the 10-year Treasury yield slightly higher on the day.

Debate-Specific Crypto Weakness Remains Unclear

The recent presidential debate between Harris and Trump is another factor affecting the markets. Prediction markets indicated Harris as the clear winner, which coincided with a dip in Trump’s election odds and a subsequent decline in BTC’s price. However, it’s important to consider that broader market factors were also at play. The dollar weakened, while yields and futures markets moved lower, indicating a general risk-off environment. This suggests the sell-off wasn’t entirely specific to BTC or Trump-related trades. As the November elections approach, monitoring the strength of this relationship will be crucial. Our current perspective is that a “Trump premium” is influencing the market, rather than a lasting “Harris discount.”

CleanSpark Acquires More Mining Facilities

CleanSpark (CLSK -6.51% ) has announced the acquisition of seven bitcoin mining facilities and associated land in Knoxville, Tennessee, for $27.5 million, equating to approximately $324,000 per megawatt. The deal, expected to close by September 25, will add 85 megawatts (MW) of capacity, increasing CleanSpark’s hash rate by over 22%, with an additional 5 exahashes per second (EH/s). According to CEO Zach Bradford, the added capacity will be operational in the coming weeks and will help the company achieve its target of 37 EH/s by the end of 2024. Bradford noted that Tennessee’s political and energy environment aligns well with Georgia’s, where CleanSpark has invested nearly $1 billion. This acquisition follows CleanSpark’s recent expansion in Wyoming and its $155 million purchase of GRIID’s stock in June.

Technical Strategy

Bitcoin Cash seems to be making repeated attempts at bottoming near the 61.8% retracement zone of its former 6/23-4/24 runup which makes it important to watch carefully for evidence of further strength.  At present, this area of recent stabilization in the last two months has occurred right near prior swing highs from late June 2023, and following five straight days of gains, BCH -1.65% is now at the highest levels since 8/27, having successfully exceeded the minor downtrend from late July on this week’s strength.  However, a bit more progress is necessary before suggesting that a larger bottom is at hand, and initial upside targets lie near $368.87, which will be important to exceed to have much confidence.  Above that level allows for a quick move up to this Summer’s highs near $457.  Conversely,  weekly closes under $287 would postpone the rally, allowing for a final flush down to $227 which should create a very appealing area to consider BCH after the sharp pullback over the last five months.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.03T +$21B(1.06%) BTC Dominance 56.29 % (0.45%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$118B (0.01%) In Exchanges +$21B (-0.12%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (-0.54%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate -0.2180(-0.1449) Binance +0.9655(2.0602) Bitfinex +0.6778(0.2334) Bitmex -0.7872(-0.3552) ByBit +0.3963(-0.4829) Deribit +0.0816(-0.0858) Huobi -0.4160(-0.4160) Kraken +0.4731(0.1451) Mean -0.2180(-0.1449) OKex -0.0474(0.2867) Sentiment BMI : 45 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $57,955(1.88%) Spot Basis +$239(0.41%) Volume 538,300(-25.97%) Open Interest 297,772(-0.61%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 18,991(-37.07%) Open Interest 287,112 (1.87%) Vol. Put/Call Ratio 1.14 (64.42%) OOI Put/Call Ratio 0.4942 (0.88%) All metrics as of 2024-09-11 17:31:50 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.14T $57,709 0.93% 36.64% ETH $284B $2,359 0.23% 3.67% -24.13% SOL $62B $132 -2.42% 30.16% -4.74% HNT $1.3B $8.16 0.61% -78.36% -84.16% DOGE $172,987 $0.0002 1.67% -99.81% -99.86% All prices as of 2024-09-11 13:41:34 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -35.12% $27 -3.40% 15.88% -15.19% ETHE -0.34% $20 -0.90% 2.78% -24.78% News Quick Bits The Block Marinade hires Fidelity Digital Asset Services founding president as chief commercial officer Stern previously served as Global Head of Digital Asset Custody at the New York-based global banking giant BNYM. The Block ZKsync developer Matter Labs poaches Solana Foundation’s former VP of marketing Matter Labs has hired Meghan Hughes, the former VP of Marketing at the Solana Foundation, as its new chief marketing officer. CoinDesk Binance.US Chooses Fireblocks to Bolster Crypto Custody, Staking Services The exchange will use Fireblocks to power hot and cold custody, customer deposits and withdrawals, and further expand staking services. Market Data The Block US spot bitcoin ETFs rebound with $117 million in daily inflows led by Fidelity’s FBTC Spot bitcoin exchange-traded funds in the U.S. posted total daily net inflows worth $116.96 million on Tuesday. The Block Bitcoin mining difficulty hits fresh all-time high following record network hash rate The positive adjustment comes after the Bitcoin network reached a record seven-day moving average hash rate of nearly 694 EH/s on Sunday. Regulation CoinDesk UK Introduces Bill to Clarify Crypto's Legal Status The Labour government said the bill will give owners of bitcoin and other digital assets greater legal protection. Mining The Block CleanSpark buys seven bitcoin mining facilities in Tennessee for $30 million The operating hashrate of the facilities is anticipated to result in 5 EH/s, which will increase CleanSpark's current hashrate by over 22%. Web 3.0 Coin Telegraph Based Rollups pitched as fix to Ethereum incentives amid L2 fee debate Some commentators note that Based Rollups align incentives between Ethereum layer 2 and its base layer validators, which could result in deflationary issuance again. Based Rollups could provide a solution to the issue of Ethereum’s layer-2 networks pulling liquidity and revenue from the blockchain’s base layer.Based Rollups, a layer-2 scaling solution that uses layer-1 validators for processing instead of their own sequencers, could “directly impact the monetization of Ethereum by making a pretty fundamental change to incentive structures,” Cinneamhain Ventures partner Adam Cochran said in a Sept. 10 X post.This could easily increase the long-term demand for Ether (ETH) by a hundred times, he added. Read more