Cryptos decline on the back of Wall Street losses and Fed speculation
Bitcoin and ether fell in Asia Wednesday morning, along with other top 10 non-stablecoin cryptocurrencies by market cap. Polygon’s MATIC led the losers, while Cardano’s ADA also fell after it was announced that Binance will scrap perpetual contracts for the two tokens. Elsewhere, the Forkast 500 NFT index declined despite market analysts predicting good times on shifting trading habits. In the US, stock futures stabilized after a bumpy Tuesday. Stronger-than-expected selling data led investors to worry that the Fed’s rate-hiking cycle could continue. Rating agency Fitch further dampened investor sentiment by suggesting it could downgrade a number of large US banks.
crypto below
According to CoinMarketCap data, bitcoin fell 0.85% to $29,169.14 in the past 24 hours (as of 7:00 a.m. Hong Kong) and is up 1.99% weekly. The world’s leading cryptocurrency has been trading below $30,000 since last Wednesday.
Cryptos took a hit Tuesday as the big three U.S. exchanges posted losses.
“It’s a rough day for many as both crypto and traditional finance are in the red. We’ve seen this before, where cryptocurrency markets mirror what we’re seeing in the Nasdaq, down 1.14%,” said Caroline Bowler, chief executive of Australian exchange BTC Markets.
“These data points are not being enhanced by the lack of liquidity as we are in the doldrums in August so far,” she added.
Bowler pointed out that for the past two months, however, Bitcoin has fluctuated within a certain range and reached a yearly high.
“There’s a lot more to this asset class,” Bowler said.
Meanwhile, Alex Kuptsikevich, senior market analyst at London-based online brokerage FxPro, was more bearish in his outlook.
“Despite the intraday volatility, the daily candles are closing near their open levels, suggesting a lack of direction and conviction,” Kuptsikevich said.
“This usually precedes a strong move and right now we see a larger downside risk with a possible drop to $28,000 in the near term,” added Kuptsikevich.
Elsewhere, Ether lost 0.95% to $1,826.79, down 1.63% over the past seven days. All other top 10 non-stable cryptocurrencies also saw declines, with Polygon’s MATIC leading the losses. The token is down 6.72% on Wednesday morning at $0.6338 and is down 7.43% for the week.
Solana’s SOL is down 5.08% to $23.84, down 1.08% weekly. Cardano’s ADA token is also down 3.13% to $0.2817, down 5.95% weekly.
The losses in ADA and MATIC came after Binance, the world’s largest cryptocurrency exchange by trading volume, announced it would be delisting perpetual contracts for the two cryptocurrencies starting Thursday.
In June, the US Securities and Exchange Commission (SEC) classified both MATIC and ADA as financial collateral in its lawsuits against Binance.US and Coinbase. Binance CEO Changpeng Zhao and Binance itself have been accused of manipulating trading volumes on the platform and diverting customer funds.
On Monday, Binance filed a protective court order against the SEC to limit the agency’s “overreaching” requests for information.
Total crypto market cap fell 1.32% to $1.16 trillion in the last 24 hours, while trading volume increased 3.48% to $29.71 billion.
NFT sale price drives change
The main Forkast 500 NFT index fell 0.05% in the last 24 hours to 2483.42 (as of 08:30 Hong Kong). However, the index is still showing a 0.22% gain this week. Forkast’s NFT indices Ethereum, Polygon and Cardano posted gains, while Solana’s index fell.
According to data from CryptoSlam, total NFT trading volume increased by 14.24% to over $17.72 million in the last 24 hours. Volumes on blockchains Ethereum, Polygon, Solana, and Mythos all saw gains, while volumes on blockchains ImmutableX and Bitcoin declined.
“Something is changing in the NFT market. Traders are very active. While this isn’t evident from the total revenue, look at the increase in daily global transactions, which is at its highest level in 18 months,” said Yehudah Petscher, NFT strategist at Forkast Labs.
The number of global NFT transactions increased by 2.74% to 590,215 in the last 24 hours. That number is a 173.5% increase from the 215,768 transactions reported on January 1st.
“The average selling price is the primary driver of this change, with yesterday’s NFT average selling price of $26.81 reflecting a three-year low last seen on September 5, 2020 at an average selling price of $15.44,” explained Petscher.
Among NFT collections, Ethereum-based DeGods topped the 24-hour sales volume ranking. With the launch of the “Season 3” digital art collection on Sunday, the collection increased by 28.70% to over $2.17 million.
“Over $71,000 has been sold on DMarket alone, many under $1, and you’ll see similar sales on Gods Unchained as well.” DraftKings and Sorare are not far off and only a few dollars are being sold per second,” said Petscher.
DMarket, a collection linked to Mythos’ network-based blockchain games, took second place in terms of sales volume. It rose 7.39% to $959,782. The fantasy sports platform of the same name, Polygon-based DraftKings NFTs are up 52.86% to $785,459.
Gods Unchained, another blockchain-based card trading game, fell 9.84% to $616,225 but still remained in CryptoSlam’s top five collections ranking.
Bad news for US banks and Fed watchers as China’s economic woes deepen
US stock futures were trading steady to higher as of 10:50 am in Hong Kong. A bumpy Tuesday followed, with the Dow Jones, S&P and Nasdaq each falling more than 1.00% during regular hours.
Asia’s major stock indices — China’s Shanghai Composite, Hong Kong’s Hang Seng, Japan’s Nikkei 225 and South Korea’s Kospi — all posted losses on Tuesday morning. The Hang Seng Index led the losses, falling 1.34%.
The US released positive retail sales on Tuesday. The 0.7% gain was higher than the estimated 0.4% as US consumers remained willing to spend despite the Federal Reserve’s recent cycle of interest rate hikes. Rising sales data, a strong job market and rising wages could lead the Fed to increase its resolve to keep interest rates at current levels or higher.
“It just means that the Fed needs to be more aggressive in raising rates and keeping rates higher for longer,” Lindsey Piegza, chief economist at US wealth management group Stifel Financial Corp., said in an interview with Bloomberg.
Still, analysts at the CME FedWatch Tool put the probability that the Federal Reserve will not hike rates in September is 90.5%, up from 88.5% on Tuesday. The Fed meets on September 19 to decide its next move on interest rates, which currently range between 5.25% and 5.50%, the highest level since January 2001.
Rating agency Fitch continued to shake US stock markets when it warned dozens of major US banks, including JPMorgan and Bank of America, would be downgraded. This was followed last week by a similar warning for mid-sized banks from rating agency Moody’s. Fitch also downgraded the United States’ long-term credit rating to AA+ from AAA in early August, citing long-term macroeconomic concerns.
Losses in the Chinese market reflected pessimistic sentiment in the US, which fell for a fourth consecutive month. The country’s economic data for July — retail sales, industrial production and investment — all came in lower than expected, adding to concerns about China’s economic health.
“Most reports point to an economy that is far from recovering from Covid Zero but is struggling to make big strides,” wrote Daniel Moss, columnist for Asian economies at Bloomberg.
“It’s also unclear whether sharp rate cuts could lead to a dramatic improvement given the real estate industry is in a tough spot and the economy is suffering from a widespread lack of demand,” Moss wrote.
China’s monetary authority unexpectedly cut lending rates by 15 basis points on Tuesday.
US investors are now awaiting Wednesday’s earnings report from giant retailer Target. Other top US retailers, Walmart and Home Depot, are due to release their quarterly results this week.
(Updates to “Shares” section.)
