Morning‌‌ ‌‌Update—May 12th—Macro and Crypto Markets

Morning‌‌ ‌‌Update—May 12th—Macro and Crypto Markets


With commodities prices rising -essentially shortages in raw materials and semiconductors- the idea that production might slow down, that inflation might pick up and so that the recovery might not be as smooth as hoped for is weighing on investors' minds. The Dow gapped down almost 1.5%, the S&P and the Nasdaq also fell. Yields, on the other hand, are picking up.

 

In the crypto space, we’re up. BTC is recouping from the previous session drop and rose about 1.5%. ETH on the other hand is boldly marching on, rising almost 5%, to close at $4,150.

 

The BTC Dominance index is moving further down, now at 44.30. As if the cycling from BTC to ETH had finally permeated smaller cap coins, we can see outperformance from a flurry of pairs like COMP, XTZ, GRT, ADA, AAVE, DOT up by between 10% and 4%.

 

I want to talk about the news but first I want to draw your attention to two charts from Glassnode, one showing the movements of old coins and another looking at miner’s holdings. 

 

One the first, you can see the long-term dynamic during this bull run and what looks like a new period of accumulation now, while BTC remains in the 50K’s; on the second we can see miners following a similar trend, where they are now holding coins rather than realising profits. Both are supportive to lower selling pressure and therefore to supported levels if not another leg up.

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Away from market data, we’re seeing interesting reports come through.

 

Palantir is considering adding bitcoin to its balance sheet -and based on how often those rumours turn out to be true, I suspect this will happen soon. They also mentioned potentially accepting bitcoin as a form of payment. The continued adoption from corporate is just amazing.

 

Very interesting to see eBay tapping into the NFT frency, allowing sales on its platform. While it might not be price affecting for crypto markets, it adds -still- to the growing adoption trend we’re seeing.

 

Also positive, Hungary is set to cut taxes currently imposed on cryptocurrency earnings, by as much as 50% from 2022 onwards. Should we be moving to Budapest already?

 

Last information nugget, you know I like to look at on-exchange reserves. Did you see that the ETH balance is now almost at a 2-year low… this is supportive and hints at a strong conviction (or just high staking rate) from ETH holders.

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Justin d'Anethan
Justin d'Anethan

Sales Manager at Diginex and EQUOS. Passionate about financial markets, long-term investments, the occasional short-term trade and disruptive technologies.


Daily Market Update
Daily Market Update

A quick market update (1-2min read). Every week day, morning in Asia, I go over major moves in macro and crypto markets, linking fundamentals to price action.

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