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Market Wrap: Bitcoin Stalls at $23K but Sits Above Cost for Average Investor’s Purchase Price

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·6 min read
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Hi, I'm Jimmy He, here to take you through the day's crypto market highlights and news.

Bitcoin (BTC) returned recent gains as the largest cryptocurrency by market capitalization declined 2.9% to $22,850.

Thursday’s decline followed an 11% increase over the previous seven trading days.

Bitcoin’s price remains stubbornly close to its 50-day exponential moving average (EMA), but has yet to surpass that level. Ether’s price, by contrast, remains above the 50-day EMA, but remains below the average ETH investor’s purchase price. Ether was recently down 0.9% over the past 24 hours.

In traditional equity markets, the S&P 500 and Nasdaq were up 0.4% and 0.8%, respectively. West Texas Intermediate (WTI) crude oil is down 3%, while gold’s price has advanced by 1.1%.

Alternative coins (altcoins) have been mixed, with Avalanche’s AVAX up 1.5% but Polkadot’s DOT token down 3.7%.

Today’s edition of "Market Wrap" was produced by Sage D. Young.

Latest prices

Bitcoin (BTC): $23,087 −2.5%

Ether (ETH): $1,564 +0.4%

S&P 500 daily close: 3,988.68 +0.7%

Gold: $1,715 per troy ounce +0.9%

Ten-year Treasury yield daily close: 2.91% −0.1


Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Jobless Claims Higher Than Expected; BTC Pares Recent Gains Slightly.

By Glenn Williams Jr.

Job data was the agenda Thursday for risk assets.

Initial jobless claims (pictured below) hit 251,000, 4.5% higher than the consensus forecast of 240,000. Continuing jobless claims were 1.38 million (versus expectations for 1.34 million), while the four-week moving average for claims increased 1% to 240,500.

Initial claims (U.S. Employment and Training Administration)
Initial claims (U.S. Employment and Training Administration)

As the U.S. central bank attempts to tame inflation without stalling economic growth too severely, we expect bitcoin investors will view today’s data as a net positive for prices, the rationale being that any data point that increases the probability of a higher-than-expected rate hike will depress prices. The CME FedWatch tool shows that expectations for a higher than 75 basis point rate hike have declined to 27.3%. For context, when we referenced this tool in Monday’s “Market Wrap,” the probability stood at 33.2%.

BTC was down on the day, albeit on lower-than-average volume. It’s worth noting that BTC breached overbought levels on July 19, using the 10-period relative strength indicator (RSI) as a proxy for measurement. The RSI is a technical tool that measures the speed and change of price movements, and is often used as an indicator of momentum. Levels of 70 and higher often indicate “overbought” conditions, while levels of 30 and below imply “oversold” conditions.

Additionally, the Average True Range (ATR) for BTC prices has been in decline since mid-June, indicating a narrower trading range. Also of note is BTC’s 10-period moving average crossing above its 20-period MA, as well as BTC prices themselves briefly touching the 50-period moving average. The decline in volume, however, implies uncertainty, and we expect that investors are viewing the $23,000 range as an area of potential resistance.

Bitcoin/U.S. dollar (TradingView)
Bitcoin/U.S. dollar (TradingView)

We see similar behavior with ether price action, the distinction being that ETH prices have surpassed their 50-day EMA, while the 10-period EMA looks poised to cross it as well. We would view this as a distinctly bullish sign if viewed in a vacuum. The upward move on lower volume however, indicates a decrease in investor conviction.

Ether/U.S. dollar (TradingView)
Ether/U.S. dollar (TradingView)

On-chain data reveals a distinction between BTC and ETH prices as well, most notably as it relates to realized price. For context, realized price can be viewed as the cost basis for a digital asset. Viewing this metric in comparison to current prices indicates whether the average investor is operating at a profit, or at a loss. As it stands, BTC is currently trading above its realized price of $21,947. Oftentimes realized prices are viewed as another area of potential support.

Bitcoin's realized price (Glassnode)
Bitcoin's realized price (Glassnode)

Conversely, the average ETH investor is currency operating at a loss, as ETH remains below its realized price of $1644. We expect that investors will view this price point (7% above current prices), as a potential area of resistance.

Ether's realized price (Glassnode)
Ether's realized price (Glassnode)

Altcoin roundup

  • DOGE Sees Volatile Trading After Upgrade: Dogecoin (DOGE) regressed from Wednesday’s gains after developers behind the meme coin released its Core 1.14.6 upgrade in early Asian hours on Thursday. The upgrade introduced essential security updates and changes to network efficiency. Read more here.

  • Vitalik Buterin Discusses Ethereum's Upcoming 'Merge' and 'Surge': The Ethereum co-founder spoke about the network’s future road map to attendees at the annual Ethereum Community Conference (EthCC) in Paris. Read more here.

  • Zapper Adds NFT and DAO Dashboards: The on-chain analytics platform is growing its platform with the addition of non-fungible token (NFT) and decentralized autonomous organization (DAO) dashboards. The integrations mark the launch of “Zapper v2.” Read more here.

Relevant insight

Other markets

Biggest Gainers

Asset

Ticker

Returns

DACS Sector

Cosmos

ATOM

+10.5%

Smart Contract Platform

Polygon

MATIC

+5.7%

Smart Contract Platform

Avalanche

AVAX

+3.0%

Smart Contract Platform

Biggest Losers

Asset

Ticker

Returns

DACS Sector

Terra

LUNA

−7.7%

Smart Contract Platform

Gala

GALA

−4.7%

Entertainment

Polkadot

DOT

−2.7%

Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.