BTC Fear & Greed Index Signals Another Breakout BTC Session

Key Insights:

  • It was a bullish Friday, with BTC rallying by 5.70% to end the day at $19,930.
  • Crypto news updates and market reaction toward US economic indicators and corporate earnings delivered another breakout session.
  • The Fear & Greed Index jumped from 31/100 to 46/100 on BTC return to $20,000.

On Friday, bitcoin (BTC) rallied by 5.70%. Following a 5.04% breakout on Thursday, BTC ended the day at $19,930. Notably, BTC visited $20,000 for the first time since November 8 and extended its winning streak to six sessions, its longest winning streak since September.

A mixed start to the day saw BTC fall to an early low of $18,725 before making a move. Steering clear of the First Major Support Level (S1) at $18,611, BTC rallied to a late high of $20,000. BTC broke through the First Major Resistance Level (R1) at $19,357 and the Second Major Resistance Level (R2) at $19,857 to end the day at $19,930.

FTX, US Economic Indicators, and Corporate Earnings Deliver $20,000

On Friday, US corporate earnings and economic indicators supported another bullish session. According to prelim figures, the Michigan Consumer Sentiment Index rose from 59.7 to 64.6 in January versus a forecasted 60.5. Significantly, the inflation expectations Index fell from 4.4% to 4.0%, its lowest level since June 2021.

JPMorgan Chase (JPM) and Bank of America (BAC) added to the bullish mood. JPMorgan and Bank of America beat earnings estimates, while Citigroup (C) fell short.

In response, the NASDAQ Composite Index rose by 0.71%, with the S&P500 gaining 0.40%.

NASDAQ correlation.
NASDAQ – BTCUSD 140123 Hourly Chart

While the US economic and earnings calendars delivered support, easing FTX contagion fear remained the key driver behind the reversal of the losses stemming from the collapse of FTX.

Investors continued to respond to the news from the bankruptcy Courts on FTX. The reports from mid-week of more than $5 billion in cash and cash equivalents and nonstrategic assets with a value of $4.6 billion eased contagion from the collapse of FTX. The latest findings could make FTX creditors whole.

Today, investors will likely continue to respond to the shift in sentiment toward FTX contagion. However, crypto market headwinds, including regulatory risk, need consideration. With the SEC targeting crypto exchanges, it could be a choppy session as the markets await the outcome of the SEC v Ripple case.

The Fear & Greed Index Responds to BTC Return to $20,000

Today, the BTC Fear & Greed Index jumped from 31/100 to 46/100. Significantly, the Index moved to the Fear-Neutral zone border. Easing FTX contagion, bets of a Fed 25-basis point interest rate hike, and a soft landing delivered a perfect storm.

Having avoided sub-20/100 and retraced the slump in response to the collapse of FTX, the Index needs to return to the Neutral zone to support the BTC move towards $25,000.

Fear & Greed Index returns to the Neutral zone border.
Fear & Greed 140123

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 4.26% to $20,779. A bullish start to the day saw BTC jump from an early low of $19,897 to a high of $21,378. BTC broke through the First Major Resistance Level (R1) at $20,378 and briefly through the Second Major Resistance Level (R2) at $20,827.

BTC hits $21,000.
BTCUSD 140123 Daily Chart

Technical Indicators

BTC needs to avoid a fall through R1 and the $19,552 pivot to retarget the Second Major Resistance Level (R2) at $20,827 and the morning high of $21,378. A return to $21,300 would signal an extended rally. However, the crypto news wires should be market-friendly to support another breakout.

In the event of an extended rally, BTC would likely test the Third Major Resistance Level (R3) at $22,102.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $19,103 into play. Barring a crypto event-fueled sell-off, BTC should avoid sub-$19,000 and the Second Major Support Level (S2) at $18,277. The Third Major Support Level (S3) sits at $17,002.

BTC resistance levels in play early.
BTCUSD 140123 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA, currently at $17,910. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($17,910) would support a breakout from R2 ($20,827) to target R3 ($22,102). However, a fall through S1 ($19,103) would give the bears a run at the S2 ($18,277) and 50-day EMA ($17,910). A fall through the 50-day EMA would signal a shift in sentiment.

EMAs are bullish.
BTCUSD 140123 4 Hourly Chart

Crypto Market Daily Highlights – BTC and DOGE Lead the Top Ten

Key Insights:

  • It was a bullish Friday session for the crypto top ten, with BTC and DOGE leading the charge.
  • US economic indicators, corporate earnings, and easing FTX contagion extended the crypto market winning streak to six sessions.
  • The crypto market cap rose by $33.28 billion to end the day at $896.84 billion.

It was a bullish session for the crypto top ten on Friday. BTC and DOGE led the top ten by market cap. Notably, BTC visited $20,000 for the first time since November 8 and the collapse of FTX.

On Friday, the US economic calendar and US corporate earnings extended the crypto market winning streak to six sessions.

Consumer sentiment supported riskier assets on Friday following the softer inflation and steady jobless claims figures on Thursday.

According to prelim figures, the Michigan Consumer Sentiment Index rose from 59.7 to 64.6 in January versus a forecasted 60.5. Significantly, the inflation expectations Index fell from 4.4% to 4.0%, its lowest level since June 2021.

JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) added to the bullish mood. JPMorgan and Bank of America beat earnings estimates, while Citigroup fell short.

After news of Goldman Sachs beginning a cost-cutting exercise, including lay-offs, JPM and BAC announced plans to continue hiring, which was also market positive. However, investors were cautious, with the banks likely to provide further guidance on forecast expectations for the year ahead.

On Friday, the NASDAQ Composite Index rose by 0.71%, with the S&P500 gaining 0.40%.

NASDAQ correlation.
Total Market Cap – NASDAQ – 140123 Hourly Chart

Crypto market news continued to drive buyer appetite on Friday. Investors responded further to the reports of FTX holding $5 billion in cash and cash equivalents and $4.6 billion in nonstrategic investments that could make FTX creditors whole.

Today, there are no external market forces to guide investors. Bullish sentiment from the week will likely continue through the early part of the day. However, the market could succumb to profit-taking, with several crypto market headwinds, including regulatory risk, lingering.

Crypto Market Extends Winning Streak to Six Sessions

It was a bullish Friday session. Range-bound through the morning, the crypto market cap fell to an early low of $855.58 billion. However, finding support through the afternoon session, the crypto market cap rose to a high of $902.83 billion before easing back.

Despite the pullback, the crypto market cap ended the session at $896.84 billion, marking a $33.28 billion gain for the day.

Notably, the crypto market cap visited $900 billion for the first time since the collapse of FTX.

Crypto market extends winning streak to six sessions.
Total Market Cap 140123 Daily Chart

The Crypto Market Movers and Shakers from the Top Ten and Beyond

It was a bullish Friday session for the crypto top ten.

BTC and DOGE rallied by 5.70% and 5.74%, respectively, to lead the way, with ADA (+4.85%) close behind.

BNB (+2.08%), ETH (+2.52%), MATIC (+1.58%), and XRP (+2.86%) also made solid gains.

From the CoinMarketCap top 100, it was a bullish session.

Decentraland (MANA) and gala (GALA) led the way, with gains of 28.98% and 25.38%, respectively. The sandbox (SAND) was also a front-runner, rising by 17.21%.

Litecoin (LTC) was the worst performer, rising by just 0.19%, with ImmutableX (IMX) and cosmos (ATOM) seeing gains of 1.80% and 1.04%, respectively.

24-Hour Liquidations Eased Back as Market Bets Turn Bullish

Over 24 hours, crypto liquidations eased back from the Thursday spike, with market bets turning bullish. At the time of writing, 24-hour liquidations stood at $190.59 million versus $262.22 million on Friday morning.

Liquidated traders over the last 24 hours were marginally lower. At the time of writing, liquidated traders stood at $47,209 versus 47,582 on Friday morning. Crypto liquidations were lower over 12 hours while higher over four hours and one hour.

Crypto market liquidations eased but remained elevated.
Total Crypto Liquidations 140123

According to Coinglass, 12-hour liquidations stood at $161.06 million, down from $183.98 million on Friday. However, four-hour liquidations jumped from $16.82 million to $118.09 million, with one-hour liquidations up from $1.09 million to $7.77 million.

The chart below shows market conditions throughout the session.

Crypto market enjoys another bullish afternoon session.
Total Market Cap 140123 Hourly Chart

NASDAQ, S&P 500, Dow Jones – Stocks Rebound After Initial Sell-Off

Key Insights

  • Banks have started to build reserves ahead of the potential recession, but their stocks managed to gain strong upside momentum after the initial sell-off. 
  • Energy stocks moved lower despite rising oil markets. 
  • It remains to be seen whether traders are ready to increase risks ahead of the weekend. 

S&P 500 (SPX500)

S&P 500
S&P 500 130123 Daily Chart

S&P 500 moved away from session lows and is currently trying to settle above the 3975 level.

Bank earnings and Michigan Consumer Sentiment report were the key drivers for the S&P 500 today.

Banks’ reports indicated that they have started to prepare for the recession. Interestingly, their stocks managed to gain solid upside momentum soon after the beginning of the trading session. JPMorgan, Citigroup, Wells Fargo, and Bank of America are trading at multi-week highs after the release of the earnings reports.

The rebound of bank stocks provided material support to S&P 500. However, it was not sufficient to push the index back into the positive territory. Interestingly, energy stocks remained under pressure despite rising oil markets.

NASDAQ (NAS100)

NASDAQ
NASDAQ 130123 Daily Chart

NASDAQ  is mostly flat in today’s trading session. Some traders were willing to take profits off the table after the recent rally, but profit-taking did not put too much pressure on NASDAQ ahead of the weekend.

Amazon is up by 2% today, while Tesla is down by 2%. Other leading NASDAQ stocks show mixed dynamics.

Dow Jones (US30)

Dow Jones
Dow Jones 130123 Daily Chart

Dow Jones has recently managed to climb back into the positive territory. JPMorgan, UnitedHealth Group, and Goldman Sachs are the best performers in the Dow Jones today.

Dow Jones needs to settle above recent highs near 34,300 to continue its rebound. From a big picture point of view, Dow Jones has a good chance to develop additional upside momentum in the upcoming weeks if the earnings season is not too bad.

For a look at all of today’s economic events, check out our economic calendar.

BTC Fear & Greed Index Signals another Bullish BTC Session

Key Insights:

  • It was a bullish Thursday, with BTC rallying by 5.04% to end the day at $18,856.
  • Crypto news updates and market reaction toward US inflation and labor market stats delivered a breakout session.
  • However, the Fear & Greed Index showed a muted response, rising from 30/100 to 31/100.

On Thursday, bitcoin (BTC) rallied by 5.04%. Following a 2.91% gain on Wednesday, BTC ended the day at $18,856. Notably, BTC visited $19,000 for the first time since November 8 and extended its winning streak to five sessions, its the longest winning streak since September.

After a bullish morning session, BTC fell to an early afternoon low of $17,866. Steering clear of the First Major Support Level (S1) at $17,509, BTC rallied to a late high of $19,112. BTC broke through the First Major Resistance Level (R1) at $18,202 and the Second Major Resistance Level (R2) at $18,452 to end the day at $18,856.

FTX and US Economic Indicators Fuel a BTC Breakout Session

On Thursday, US economic indicators supported riskier assets. Softer inflation numbers and steady labor market stats raised bets of a 25-basis point Fed interest rate hike in February. Significantly, the numbers also suggested a less aggressive Fed interest rate path, raising the prospects of a soft landing.

The US annual inflation rate softened from 7.1% to 6.5%, with consumer prices unexpectedly falling in December. Initial jobless claims fell from 206k to 205k in the week ending January 6.

In response to the bullish combination, the NASDAQ Index and the S&P 500 rose by 0.64% and 0.34%, respectively.

Investors continued to respond further to the latest from the bankruptcy Courts on FTX. The news from mid-week of more than $5 billion in cash and cash equivalents and nonstrategic assets with a value of $4.6 billion eased contagion from the collapse of FTX.

Today, the US economic calendar will continue to influence, with consumer sentiment figures and FOMC member chatter to draw interest. While a pickup in consumer sentiment would be bullish, hawkish commentary could test the appetite for riskier assets.

US corporate earnings will also be a focal point. Gloomy outlooks would test the appetite for riskier assets. JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) will release earnings results.

The NASDAQ mini was down by 12 points this morning.

NASDAQ Correlation.
NASDAQ – BTCUSD 130123 Hourly Chart

The Fear & Greed Index Sees a Modest Rise Despite BTC Breakout

Today, the BTC Fear & Greed Index rose from 30/100 to 31/100. Significantly, the Index continued moving toward the Neutral zone, with bets of a 25-basis point Fed interest rate hike and a soft-landing delivering support. Despite the latest upswing, the Index sits well below the Neutral zone.

Crypto market headwinds continue to peg the Index back, though the latest FTX updates should continue easing fears of a cascading effect from the collapse of FTX.

Avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse November 6 high of 40/100 to support a BTC run at $25,000.

Fear & Greed Index climbs higher.
Fear & Greed 130123

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.40% to $18,781. A mixed start to the day saw BTC rise to an early high of $18,895 before falling to a low of $18,725.

BTC sees early red.
BTCUSD 130123 Daily Chart

Technical Indicators

BTC needs to avoid the $18,611 pivot to target the First Major Resistance Level (R1) at $19,357. A return to $19,000 would signal a bullish session. However, the crypto news wires and the NASDAQ Index should be market-friendly to support another breakout.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $19,857 and resistance at $20,000. The Third Major Resistance Level (R3) sits at $21,103.

A fall through the pivot would bring the First Major Support Level (S1) at $18,111 into play. Barring a risk-off-fueled sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,365. The Third Major Support Level (S3) sits at $16,119.

An adverse crypto market event would bring sub-$16,500 into play.

BTC resistance levels in play above the pivot.
BTCUSD 130123 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA, currently at $17,459. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($18,111) and the 50-day EMA ($17,459) would support a breakout from R1 ($19,357) to target R2 ($19,857) and $20,000. However, a fall through S1 ($18,111) would give the bears a run at the 50-day EMA ($17,459) and S2 ($17,365). A fall through the 50-day EMA would signal a shift in sentiment.

EMAs are bullish.
BTCUSD 130123 4 Hourly Chart

Crypto Market Daily Highlights – BTC Hits $19,000 to Lead the Top Ten

Key Insights:

  • It was a bullish Thursday session for the crypto top ten, with BTC leading the charge.
  • US economic indicators and FTX updates were the driving force behind the Thursday breakout session.
  • The crypto market cap rose by $25.57 billion to end the day at $863.60 billion.

It was a bullish session for the crypto top ten on Thursday. BTC enjoyed a rare breakout session, with ADA, DOGE, and MATIC also finding support. Notably, BTC visited $19,000 for the first time since November 8 and the collapse of FTX.

On Thursday, the market turned its attention to the US economic calendar and the all-important US CPI report. In line with forecasts, the US annual inflation rate softened from 7.1% to 6.5%, with consumer prices unexpectedly falling in December.

The numbers supported the market bets of a 25-basis point Fed interest rate hike in February and a less aggressive interest rate path ahead.

US labor market numbers added to the bullish mood. While inflationary pressures are easing, labor market conditions held steady, delivering hope of a soft landing. Initial jobless claims slipped from 206k to 205k in the week ending January 6.

The NASDAQ Index responded to the favorable numbers, rising by 0.64%, with the S&P 500 ending the day up by 0.34%.

FTX updates also delivered support. The news from mid-week of more than $5 billion in cash and cash equivalents and nonstrategic assets with a value of $4.6 billion eased contagion from the collapse of FTX.

Today, US economic indicators and FOMC member commentary will influence. US consumer sentiment figures will draw interest in the afternoon session. Following Thursday’s CPI report, a pickup in consumer sentiment would deliver more support to riskier assets.

However, the corporate earnings season kicks off today, with US bank earnings in focus. Gloomy outlooks would test the appetite for riskier assets. JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) will release earnings results.

The NASDAQ mini was down 1.75 points this morning.

NASDAQ correlation.
Total Market Cap – NASDAQ – 130123 Hourly Chart

Crypto Market Extends Winning Streak to Five Sessions

It was another choppy session on Thursday. After a bullish start to the day, the crypto market cap fell to an early afternoon low of $829.15 billion. However, an afternoon rally saw the crypto market cap hit a high of $874.34 billion before easing back.

Despite the pullback, the crypto market cap ended the session at $863.60 billion, marking a $25.57 billion gain for the day. Notably, the crypto market cap ended the session at $800 billion for the fourth time since December 15 and extended its winning streak to five sessions.

Crypto market extends winning streak.
Total Market Cap 130123 Daily Chart

The Crypto Market Movers and Shakers from the Top Ten and Beyond

It was a bullish Thursday session for the crypto top ten.

BTC rallied by 5.04% to lead the way, with ADA (+2.17%), DOGE (+2.69%), and MATIC (+2.68%) also making solid gains.

However, BNB (+1.05%), ETH (+1.93%), and XRP (+0.57%) trailed the front-runners.

From the CoinMarketCap top 100, it was a mixed session.

Aptos (APT) led the way, surging by 22.26%, with frax shares (FXS) and immutableX (IMX) seeing gains of 16.08% and 9.43%, respectively.

However, nexo (NEXO) fell by 3.38%, with avalanche (AVAX) and apecoin (APE) seeing losses of 2.37% and 2.41%, respectively.

24-Hour Liquidations Spike as BTC Returns to $19,000

Over 24 hours, crypto liquidations continued to rise, with another bullish crypto session catching more investors holding short positions. At the time of writing, 24-hour liquidations stood at $262.22 million versus $134.15 million on Thursday morning.

Liquidated traders over the last 24 hours were also higher. At the time of writing, liquidated traders stood at 47,582 versus 31,423 on Thursday morning. Crypto liquidations were higher over 12 hours while down over four hours and one hour.

Crypto liquidations trend higher as BTC hits $19,000.
Total Crypto Liquidations 130123

According to Coinglass, 12-hour liquidations stood at $183.98 million, up from $121.19 million on Thursday. However, four-hour liquidations fell from $90.80 million to $16.82 million, with one-hour liquidations down from $73.85 million to $1.09 million.

The chart below shows market conditions throughout the session.

Crypto market enjoys another breakout session.
Total Market Cap 130123 Hourly Chart

Goldman Sachs Sounds the Alarm on the Eve of Earnings Season

In recent weeks, the market focus has been on US economic indicators, the Federal Reserve, and the US economy.

A mixed round of US stats led the markets to bet on a 25-basis point Fed interest rate hike in February. According to the FedWatchTool, the probability of a 25-basis point February interest rate hike stands at 79.2% versus 40.6% one month ago.

Markets bet on a 25-basis point Fed rate hike.
FedWatchTool 110123

However, Fed monetary policy uncertainty lingers. The US unemployment rate is just 3.5%, well below the Fed’s 5% mandate. While inflation has softened, it remains elevated, suggesting an extended period of interest rate hikes.

Significantly, the latest FOMC meeting minutes removed hopes of a 2023 Fed pivot, with members seeing rates higher for longer. According to the minutes,

“No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023.”

The hawkish minutes coincided with the December ISM Manufacturing and Non-Manufacturing PMI numbers that showed the US private sector contracted at the end of the year.

World Bank Sends a Grim Economic Outlook as Indicators Flash Red

Globally, the global economic outlook is no better. This morning, the World Bank published its economic growth forecasts for 2023. It was grim reading, with the World Bank projecting the global economy to decelerate to 1.7% growth in 2023, the third slowest growth rate in almost thirty years. Significantly, the January projection is 1.3 percentage points below the previous forecast.

The report highlights several contributory factors to the gloomy outlook, including synchronous policy tightening to combat inflation, deteriorating financial market conditions, and the continued economic disruptions from the war in Ukraine.

China, the Eurozone, and the US are reportedly experiencing a period of pronounced weakness. The weakness is resulting in a cascade effect, impacting the emerging markets, and developed economies.

The World Bank did not hold back, warning,

“Further negative shocks – such as higher inflation, even tighter policy, financial distress, deeper weakness in major economies, or rising geopolitical tensions – could push the global economy into recession.”

In the FX Empire EUR/USD forecast for 2023, we discussed the threat of a global economic recession, rising geopolitical risk, and social tensions as economic conditions deteriorate.

Unsurprisingly, financial institutions are taking notice and beginning to act.

Goldman Sachs Sounds the Alarm Bell on the Eve of Earnings Season

This morning, news hit the wires of US banking giant Goldman Sachs (GS) beginning a ‘massive round of job cuts.’

According to the report, the bank is tightening its belt in the face of falling profits. Beyond cutting staff, the bank will also review its expenses. The report highlighted that Goldman Sachs CEO David Solomon has repeatedly raised concerns about the economic outlook.

The news comes on the eve of earnings season, with several US banks set to release earnings on Friday, including JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC). Goldman Sachs will release earnings on January 17, along with Morgan Stanley (MS).

While earnings will draw attention, the markets will likely be more sensitive to the earnings outlooks. Plans to tighten the belt and the talk of a global recession would likely overshadow any better-than-expected results. Year-to-date, Goldman Sachs’s share price is up 3.22%.

 

5 Things to Know in Crypto Today – XRP Joins the Market Recovery

Key Insights:

  • XRP and the broader crypto market are in recovery after the Fed Chair Powell-fueled sell-off on Wednesday.
  • Arweave (AR), Litecoin (LTC), and polygon (MATIC) lead a bullish morning session.
  • Crypto Winter news continues to hit the wires, however.

XRP Joins the Broader Crypto Market in Recovery Mode

On Wednesday, Fed Chair Powell wiped $41 billion off the crypto market cap in a few hours. Powell poured cold water on investor hopes of a December Fed pivot. The Fed Chair warned the markets of high inflation and the need to continue with aggressive policy moves to bring inflation to target.

Riskier assets found buyer support this morning. The crypto market is on track to reverse a $20.8 billion loss from the Wednesday session.

However, market volatility will likely pick up later today. US economic indicators could support Powell’s more hawkish stance. We expect the ISM Non-Manufacturing PMI and its sub-components to draw the most investor interest.

A pickup in hiring and prices could test today’s bullish sentiment.

While arweave (AR), litecoin (LTC), and polygon (MATIC) lead the way, XRP is also on the move. Hopes of a favorable outcome to the SEC v Ripple case continue to limit the downside.

This morning, the crypto market was up $15.2 billion to $966.8 billion, with XRP up 1.26% to $0.4559.

Crypto market in recovery.
Total Market Cap 031122 Daily Chart

Polygon (MATIC) Responds to News of Instagram NFTs

On Wednesday, Meta (META) updated a May 2022 announcement, stating,

“Creators will soon be able to make their own digital collectibles on Instagram and sell them to fans, both on and off Instagram.”

The announcement went on to say,

“They’ll have an end-to-end toolkit – from creation (starting on the Polygon blockchain) and showcasing, to selling.”

Investors responded favorably to the news, with MATIC up 10.64% to $0.9659 this morning.

MATIC on the move.
MATICUSD 031122 Daily Chart

JPMorgan Executes DeFi Trade on Public Blockchain in Singapore

On November 2, the Monetary Authority of Singapore announced the completion of its first live trades under Project Guardian, which ‘explores potential decentralized finance (DeFi) applications in wholesale funding markets.’

According to the announcement,

“DBS Bank, JP Morgan (JPM), and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising of tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (Yen), and Singapore Dollar (SGD).”

Robinhood (HOOD) Sees Revenue Fall 12% in Q3 2022

On Tuesday, Robinhood (HOOD) released its Q3 2022 results. According to the press release, cryptocurrency transaction-based revenues fell 12%, while revenues increased for options (10%) and equities (7%).

While transaction-based revenues fell, Robinhood enhanced user experiences in the quarter. Notably, the report stated,

“Robinhood rolled out the beta version of Robinhood Wallet, our self-custody, web3 wallet to the first ten thousand customers on the waitlist. The approachable, standalone app gives customers total control of their crypto, allowing them to trade and swap with no network fees.”

In the quarter, Robinhood also expanded its coin listings to include USD Coin (USDC), cardano (ADA), uniswap (UNI), stellar lumen (XLM), and avalanche (AVAX).

Dapper Labs Announces 22% Reduction Citing Macroeconomic Factors

This morning, Founder and CEO of Dapper Labs Roham Gharegozlou announced a 22% cut in the Dabber Labs workforce. In the announcement, the Dapper Labs CEO said,

“These reductions are the last thing we want to do, but they are necessary for the long-term health of our business and communities. We know web3 and crypto is the future across a multitude of industries – with 1000x potential from here in terms of mainstream adoption and impact— but today’s macroeconomic environment means we aren’t in full control of the timing.”

The announcement coincided with news of NBA Top Shot having its worst month since 2020. According to CryptoSlam, sales totaled $2.68 million in October 2022, down from $4.68 million in September. October sales were the lowest since $0.87 million in December 2020. Sales peaked in February 2021 at $224.07 million.

 

S&P 500 (SPY) Pulls Back Amid Rising Inflation Expectations

Key Insights

  • S&P 500 declined towards the 3600 level as Inflation Expectations increased from 4.7% to 5.1%. 
  • Rising Inflation Expectations will force the Fed to raise rates aggressively, which is bearish for stocks. 
  • A move below the support at 3585 will push S&P 500 towards the support level at 3560.

S&P 500 Retreats Ahead Of The Weekend

S&P 500 pulled back towards the 3600 level as traders focused on recession risks. The Retail Sales report indicated that Retail Sales remained unchanged in September, compared to analyst consensus which called for growth of 0.2%.

Michigan Consumer Sentiment report indicated that Consumer Sentiment improved from 58.6 to 59.8. This report provided additional support to the U.S. dollar, which was bearish for commodity markets and commodity-related stocks.

Importantly, Inflation Expectations increased from 4.7% in September to 5.1% in October. The increase in Inflation Expectations was bearish for stocks as the Fed tries to keep Inflation Expectations at bay.

The yield of 10-year Treasuries has recently settled above the 4.00% level and is moving towards the yearly highs at 4.08%. In case the yield of 10-year Treasuries settles above this level, stocks will move closer to yearly lows.

Today’s pullback is broad, and all market segments are under pressure. The sell-off is led by basic materials stocks, which are weak due to the strong pullback in commodity markets. Fertilizer producers Mosaic and CF Industries are down by about 8% in today’s trading session.

In the tech segment, Tesla are NVIDIA are down by 5% as traders rush out of riskier assets.

Wells Fargo, JPMorgan Chase, and U.S. Bancorp are up by more than 3% after earnings reports. Interestingly, the rebound of leading bank stocks failed to provide any support to the broader market today. Bank stocks were oversold and traders’ expectations were low, which allowed them to rally when the reports were not as bad as traders feared.

S&P 500 Moved Back Below 3600

S&P 500

S&P 500 managed to settle back below the support at 3615 and is moving towards the next support level at 3585. If S&P 500 declines below this level, it will head towards the next support at 3560. A successful test of the support at 3560 will open the way to the test of the support at 3525.

On the upside, the previous support level at 3615 will serve as the first resistance level for S&P 500. If S&P 500 manages to settle back above this level, it will move towards the resistance at 3640. In case S&P 500 climbs above 3640, it will head towards the resistance at 3675.

For a look at all of today’s economic events, check out our economic calendar.

BTC Fear & Greed Index Remains in Extreme Fear Despite BTC Gain

Key Insights:

  • On Thursday, bitcoin (BTC) rose for the third time in nine sessions.
  • A mixed market reaction to the US CPI report saw BTC tumble to a low of $18,161 before tracking the NASDAQ into positive territory.
  • The Bitcoin Fear & Greed Index increased from 20/100 to 24/100.

On Thursday, bitcoin (BTC) rose by 1.17%. Following a 0.51% gain on Wednesday, BTC ended the day at $19,385. Notably, BTC fell short of $20,000 for the sixth consecutive session while avoiding the red for the third time in nine sessions.

After a range-bound start to the day, BTC tumbled to a mid-day low of $18,161 as investors responded to the US CPI report. BTC fell through the Major Support Levels and the September low of $18,210.

However, finding afternoon support from the NASDAQ, BTC rallied to a high of $19,515. BTC broke through the First Major Resistance Level (R1) at $19,254 and the Second Major Resistance Level (R2) at $19,347 to end the day at $19,385.

US economic indicators delivered a choppy Thursday session, with the US CPI report the focal point.

The US annual inflation rate softened from 8.3% to 8.2% in September versus an 8.1% forecast. The initial market reaction to the numbers was bearish. However, riskier assets bounced back on relief that the headline number was not higher.

In response to the CPI report, the probability of a 75-basis point rate hike in November jumped from 84.5% to 96.3%. Significantly, the chances of a 75-basis point Fed rate hike in December jumped from 28.6% to 71.5%.

Despite the rising bets of another hawkish move in December, the NASDAQ rallied by 2.23% as the earnings season got underway. Later today, JPMorgan (JPM) will be among the big names to release quarterly earnings results, with US retail sales and consumer sentiment numbers also in focus early in the US session.

This morning, the NASDAQ Mini was down 23.5 points.

NASDAQ correlation.
NASDAQ – BTCUSD 141022 5 Minute Chart

The Fear & Greed Index Holds Jumps on BTC Rebound

Today, the Fear & Greed Index rose from 20/100 to 24/100, with a third BTC rise in nine sessions providing support. Despite the increase, the Index remained in the Extreme Fear zone, reflecting investor sentiment towards the Fed, the war in Ukraine, and the economic outlook.

However, avoiding sub-20/100 amidst rising bets of 75-basis point Fed rate hikes in November and December further supports a possible market bottoming out.

For the bulls, the Index will need to continue avoiding sub-20/100 to support a shift in sentiment. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Fear & Greed Index rises.
Fear & Greed 141022

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.28% to $19,440. A mixed start to the day saw BTC fall to an early low of $19,347 before rising to a high of $19,445.

BTC finds early support.
BTCUSD 141022 Daily Chart

Technical Indicators

BTC needs to avoid the $19,020 pivot to target the First Major Resistance Level (R1) at $19,880. A BTC move through the Thursday high of $19,515 would signal a bullish session. However, today’s US economic indicators and FOMC member chatter will have to be crypto-friendly to support another bullish session.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $20,374 to target $21,000. The Third Major Resistance Level (R3) sits at $21,728.

A fall through the pivot would likely see BTC test the First Major Support Level (S1) at $18,526. Barring another extended sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,666.

The Third Major Support Level (S3) sits at $16,312.

BTC resistance levels in play above the pivot.
BTCUSD 141022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 100-day EMA, currently at $19,447.

The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA slipped back from the 200-day EMA to deliver mixed signals.

BTC needs to move through the 100-day EMA ($19,447) to target R1 ($19,880) and support a return to $20,000. However, a fall through the 50-day EMA ($19,339 ) would give the bears a run at S1 ($18,526).

EMAs bearish.
BTCUSD 141022 4 Hourly Chart

5 Things to Know in Crypto Today – SEC Took Another Loss in Court

Key Insights:

  • The crypto market found modest support this morning, though downside risks will test sentiment in the afternoon session.
  • Rulings from the SEC v Ripple case deliver the SEC with another blow as Ripple looks for a decisive victory.
  • Crypto adoption continued to grab the news headlines, with Google and Coinbase (COIN) the latest partnership to drive crypto payments.

Crypto Market Steadies After the Sixth Loss from Seven Sessions

On Tuesday, the crypto market fell by $5.9 billion to $881.3 billion. The loss marked the sixth loss from seven sessions as riskier assets bore the brunt of central bank activity and policy goals.

As the markets prepare for tomorrow’s US CPI report, which could decide the fate of November and December’s Fed policy moves, downside risks for the day ahead also need consideration. Downside risks include a pickup in US wholesale inflation and hawkish FOMC meeting minutes accompanied by hawkish FOMC member chatter.

This morning, the crypto market found much-needed support, rising by $4.1 billion to $885.4 billion. However, the upside is modest when considering the downside risks for today. Crypto correlation with the NASDAQ 100 will likely continue. The NASDAQ Mini was up 57.75 points, providing support.

Crypto market cap steadies.
Total Market Cap 121022 Daily Chart

SEC Loses Yet Another Court Ruling in the Ongoing SEC v Ripple Case

This morning, XRP found support as investors looked to move past two days of heavy losses. Updates from the ongoing SEC v Ripple case from Tuesday were XRP positive. XRP was up 0.72% to $0.48828. XRP had struck an early high of $0.49222 before easing back to sub-$0.49.

XRP finds support.
XRPUSD 121022 Daily Chart

Going into October, the SEC was on the back foot after the Court overruled the SEC’s objection to the Court denying the SEC motion to protect the William Hinman speech-related documents under the attorney-client privilege.

For the SEC and the Defendants, the Hinman documents remain a focal point of the case. However, since the Court ruling, the SEC has yet to appeal. An appeal would take the SEC’s attempts to shield William Hinman’s speech-related documents under attorney-client privilege to more than seven.

In a famous 2018 speech, Division of Corporation Finance, William Hinman, said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

However, while SEC ponders its next move, the Court delivered the SEC with another blow on Tuesday by granting I-Remit and TapJets requests to file amicus briefs. I-Remit and TapJets are independent businesses that use XRP as a payment mechanism and could prove invaluable in Ripple’s fight to prove that XRP is not a security.

The SEC had opposed the filing in a letter to the Court before the Court’s ruling.

Microsoft and Meta Partnership Takes Office 365 Virtual

Meta platforms and Microsoft (MSFT) have formed a partnership to take products from Microsoft Office 365 into Meta’s Virtual Reality (VR) platform.

DOGE and SHIB Benefit from a new Google-Coinbase Partnership

On Tuesday, Google announced a partnership with Coinbase (COIN) to support crypto payments for cloud services. According to the announcement, Google will begin allowing selected customers to pay for cloud services with crypto in early 2023. Coinbase Commerce supports ten cryptos, including APE, BCH, BTC, DOGE, ETH, LTC, SHIB, USDC, USTC, and DAI.

Coinbase also responded positively to the news, with the share price rising by 4.65% on Tuesday while the NASDAQ 100 fell by 1.10%.

Coinbase rises in response to Google partnership.
COIN 121022 Daily Chart

JPMorgan and Visa Team Up to Streamline Cross-Border Blockchain Payments

JPMorgan (JPM) and Visa (V) link up to create connectivity between their blockchain networks, Liink and BTB Connect.

S&P 500 (SPY) Rebounds After Testing New Lows

Key Insights

  • S&P 500 found support below the 3600 level and moved towards the resistance at 3640.
  • The rebound is broad as traders buy stocks from various industries near yearly lows. 
  • A move above 3640 will push S&P 500 towards the resistance at 3675.

S&P 500 Gains Ground As Treasury Yields Pull Back

S&P 500 gained upside momentum after testing new lows near 3570 as traders rushed to buy stocks after the strong pullback.

The yield of 10-year Treasuries failed to settle above the 4.00% level and pulled back below 3.90%, providing additional support to stocks.

While the rebound is broad, it is important to note that semiconductor stocks remain under pressure. Qualcomm, Qorvo, ON Semiconductor and other stocks in this market segment are moving lower as traders react to the recent export controls imposed on China.

Meta and NVIDIA tested new lows today but managed to move away from yearly lows amid a broad rebound in the stock market.

From a big picture point of view, today’s rebound looks technical. S&P 500 moved from the 3800 level to 3575 in just four trading sessions, so it’s not surprising to see that some traders were ready to buy stocks at a material discount to recent levels.

The market will soon get tested by the earnings season. Big banks, including JP Morgan Chase, Wells Fargo, Citigroup, and Morgan Stanley, will present their results at the end of this week, and their reports will have a significant impact on market mood. Trading may stay choppy ahead of these important reports.

S&P 500 Tests Resistance At 3640

S&P 500

S&P 500 managed to settle back above 3615 and is trying to settle above the next resistance level at 3640. In case this attempt is successful, it will head towards the resistance at 3675. A move above the resistance at 3675 will push S&P 500 towards the 3700 level.

On the support side, the nearest support level for S&P 500 is located at 3615. If S&P 500 declines below this level, it will move towards the next support level at 3585. A successful test of the support at 3585 will push S&P 500 towards the next support level at 3560.

For a look at all of today’s economic events, check out our economic calendar.

ETH and BTC and Returns to Sub-$1,250 and $18,500 in the Fed’s Hands

Key Insights:

  • After Monday’s bearish session, bitcoin (BTC) and ethereum (ETH) were back in the red this morning.
  • Fed fear and the likely effects of Fed monetary policy on the global economy continue testing crypto investor sentiment.
  • The technical indicators remain bearish ahead of this week’s US CPI report.

On Monday, bitcoin (BTC) fell by 1.63%. Reversing a 0.13% rise from Sunday, BTC ended the day at $19,128. The bearish session left BTC short of $20,000 for the third session in a row, while BTC also managed to avoid sub-$19,000.

A bullish start to the day saw BTC strike an early high of $19,527. However, falling short of the First Major Resistance Level (R1) at $19,556, BTC slid to a late low of $19,000. BTC fell through the First Major Support Level (S1) at $19,329 and the Second Major Support Level (S2) at $19,214 to end the day at $19,128.

Ethereum (ETH) fell by 2.49%. Reversing a 0.53% gain from Sunday, ETH ended the day at $1,290.

Tracking the broader market, ETH rose to an early high of $1,338. ETH broke through the First Major Resistance Level (R1) at $1,332 before sliding to a final-hour low of $1,288.

The extended sell-off saw ETH fall through the First Major Support Level (S1) at $1,310 and the Second Major Support Level at $1,298 to end the day at $1,290.

External market forces sent the BTC, ETH, and the broader crypto market into negative territory. This morning, the narrative remained the same. Fears of an escalation in the war in Ukraine, Fed monetary policy, inflation, and economic uncertainty weighed on riskier assets.

Overnight, Fed Vice President Brainard and JPMorgan Chase & Co (JPM) CEO Jamie Dimon delivered their views on the economic outlook. Neither painted a rosy picture, with Dimon talking of the likelihood of the US and global recessions in six to nine months.

The negative tones contribute to the bearish Monday session and this morning’s pullback.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.14% to $19,102. A bearish morning saw BTC fall from an early high of $19,127 to a low of $18,957 before recovering.

BTC under pressure.
BTCUSD 111022 Daily Chart

Technical Indicators

BTC needs to move through the $19,218 pivot to target the First Major Resistance Level (R1) at $19,437 and the Monday high of $19,527. A BTC return to $19,500 would signal a bullish session. However, FOMC member chatter will need to be less hawkish to support a breakout session.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $19,745 to target $20,000. The Third Major Resistance Level (R3) sits at $20,272.

Failure to move through the pivot would likely see BTC test the First Major Support Level (S1) at $18,910. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,691 should limit the downside.

The Third Major Support Level (S3) sits at $18,164.

BTC support levels in play below the pivot.
BTCUSD 111022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,506.

On Monday, the 50-day EMA crossed through the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The bearish cross and the 100-day EMA pullback delivered bearish price signals.

Following Monday’s bearish cross, BTC would need to move through R1 ($19,437) and the 50-day EMA ($19,506) to ease selling pressure. However, failure to move through the 50-day EMA ($19,506) would leave sub-$19,000 support levels in play.

EMAs bearish.
BTCUSD 111022 4 Hourly Chart

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.26% to $1,287. A bearish start to the day saw ETH fall from an early high of $1,290 to a low of $1,267 before recovering.

ETH briefly fell through the First Major Support Level (S1) at $1,273.

ETH under early pressure.
ETHUSD 111022 Daily Chart

Technical Indicators

ETH needs to move through the $1,305 pivot to target the First Major Resistance Level (R1) at $1,323 and the Monday high of $1,338. However, investor sentiment would need to improve to support a return to $1,300.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,355 would likely come into play. The Third Major Resistance Level (R3) sits at $1,405.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,273 in play. Barring an extended US session sell-off, ETH should avoid sub-$1,250. The Second Major Support Level (S2) at $1,255 should limit the downside. However, updates from Ukraine and FOMC member chatter could put ETH under more pressure.

The Third Major Support Level (S3) sits at $1,205.

ETH support and resistance levels in play below the pivot.
ETHUSD 111022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below 50-day EMA, currently at $1,323. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,323) and the 50-day EMA ($1,323) would give the bulls a run at the 100-day EMA ($1,342) and R2 ($1,355). However, failure to move through the 50-day EMA ($1,323) would leave the support levels in play.

EMAs bearish.
ETHUSD 111022 4 Hourly Chart

Inflation, the Fed, and the War Spell More Pain for US Equities

The US equity markets are under pressure, with investors unable to shake off the Fed effect. In the third quarter, the NASDAQ fell by 4.11%. Notably, the NASDAQ extended its losing streak to three consecutive quarters, its worst since 2008.

Things have not gotten any better going into the final quarter of the year. After a brief hiatus into positive territory, the NASDAQ 100 is back in the red. Market sensitivity toward US economic indicators and FOMC member chatter is unwavering.

FederalWatch Tool Highlights More Bullish December Bets

Economic data from the first week of October has cemented bets of a 75-basis point Fed rate hike in November.

According to the CME Group’s FedWatch Tool, the probability of a 75-basis point hike is 76.5%. While down from a post-US jobs report of 81.1%, the numbers remain conclusive. However, with the markets accepting a hawkish November move, the focus has shifted to the December policy decision.

This morning, the probability of a 75-basis point December hike stands at 28.1%. The chances of a 75-basis point hike have risen from 0.2% as of October 4 and 0% as of September 30.

December bets on the rise for 75-basis point hike
FEDWatch Tool 111022

Notably, economic data continues painting a rosy economic backdrop that allows the Fed to front load at a more aggressive pace. The Fed and the markets are well aware that once the US unemployment rate inches past 4.0% the rate of deterioration in labor market conditions will likely accelerate, forcing the Fed to take its foot off the gas.

On Monday, Fed Vice Chair Brainard reportedly said that Fed rate hikes were beginning to slow the economy – perhaps more than expected – and that the impact of tighter monetary policy would not be evident for months to come.

Despite Brainard’s impact assessment, the Fed Vice Chair refrained from suggesting the need to take a less aggressive rate path to bring inflation to target.

JPMorgan CEO Jamie Dimon Sounds the Recession Alarm

Fed Vice Chair Brainard’s comments coincided with JPMorgan Chase & Co (JPM) CEO Jamie Dimon, who projected the US and the global economy falling into a recession by mid-2023. Speaking to CNBC,  Dimon said that the US economy is still in good shape while adding,

“But you can’t talk about the economy without talking about stuff in the future – and this is serious stuff.”

Among concerns, Dimon highlighted the effects of inflation, higher-than-expected interest rates, the unknown impact of quantitative tightening, and the war in Ukraine. The JPMorgan CEO also talked of the Fed waiting too long but clearly catching up.

Dimon concluded by saying,

“Far more serious thing is the war. Far more serious than the short-term effects of the economy and things like that.”

JPMorgan Chase will be in the spotlight on Friday when it releases Q3 2022 earnings. Dimon talked of market conditions becoming disorderly in the not-too-distant future. This earnings season could deliver a second blow to a market coming to terms with the Fed’s policy goals.

This morning, the NASDAQ 100 Mini was down 54.5 points, with the Dow Mini and the S&P 500 Mini down by 151 points and 19.75 points, respectively.

S&P 500 Poised to Break into Bear Market Territory; Weaker Dollar Key to Turning Stockmarket Around

U.S. stock index futures are edging lower on Monday, shortly before the cash market opening as traders brace for more selling pressure. The weakness is being fueled by worries that the Federal Reserve’s aggressive push to curb inflation may tip the American economy into recession.

At 12:23 GMT, the blue chip Dow Jones Industrial Average is trading 29462.00, down 207.00 or -0.70%. The benchmark S&P 500 Index is at 3678.15, down 30.25 or -0.82% and the tech-heavy NASDAQ Composite is at 11296.15, down 80.00 or -0.70%.

Weakening investor sentiment is being fueled by surging global interest rates and turmoil in the foreign currency markets.

S&P 500 Breathing on Bear Market Low

In the cash market, investors will be closely watching the S&P 500 for any break below its bear market low. The S&P’s low close for the year in June was 3,666.77. It closed Friday at 3,693.23 after trading briefly below that close. The benchmark’s intraday low for the year is 3636.87. Any trade below those levels could drive more selling in the market.

Tumultuous Forex Trade Could Create Havoc for Stocks

The British Pound plunged to a record low on Monday against the U.S. Dollar. Sterling at one point fell to an all-time low of $1.0382. The move is being fueled by a combination of the Federal Reserve’s aggressive hiking campaign and last week’s announcement by the new U.K. government that it would implement tax cuts and investment incentives to boost growth.

The consensus doesn’t believe there will be a currency intervention on the Sterling, but the onus is now on the central bank to do more to tight policies to stabilize the British Pound.

Unless there is severe financial distress due to the weakening currency, the Bank of England will wait until its next meeting to show decisive action to raise rates aggressively in the next couple of meetings.

Cyclical Stocks Trading Lower on Worries Over Fed-Driven Recession

In premarket trading on Monday, cyclical stocks traded convincingly lower on worries that a series of sharp interest rate hikes by the Fed could rattle the economy.

Boeing Co, Chevron Corp, Caterpillar Inc and JPMorgan Chase & Co fell more than 1% each, while growth stocks including Apple Inc, Microsoft Corp, Amazon.com Inc and Tesla Inc shed between 0.4% and 0.5%.

Short-Term Outlook

Going into today’s trading session, I believe investors should be focused on the U.S. Dollar. It’s hard not to have concerns about long-term stock market performance with the dollar accelerating, global yields soaring and the breakdowns across the global FX.

However, a concerted effort by the major central banks to bring the U.S. Dollar could trigger a dramatic reversal in equity prices.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 (SPY) Tries To Gain More Ground Despite Powell’s Comments

Key Insights

  • Hawkish commentary from Fed Chair Powell put some pressure on leading tech stocks. 
  • Healthcare and financial stocks enjoy strong support today. 
  • S&P 500 needs to settle above 4015 to continue its rebound.

S&P 500 Tries To Continue Its Rebound

S&P 500 is swinging between gains and losses today as leading tech stocks have once again found themselves under pressure. Apple, Alphabet, Amazon are down by about 1%.

Today, traders focused on the hawkish comments from Fed Chair Jerome Powell, who highlighted the importance of Fed’s fight against inflation. Treasury yields moved higher, which was bearish for growth stocks and put some pressure on S&P 500.

At the same time, it should be noted that demand for stocks is visible in the healthcare and financial segments. For example, big banks like JP Morgan, Citigroup, Morgan Stanley are up by about 2% today.

S&P 500

S&P 500 failed to settle above the 4000 level and pulled back. Currently, S&P 500 has settled between the support at 3950 and the resistance at 3980. In case S&P 500 declines below the 3950 level, it will gain additional downside momentum and move towards the next support level at 3915.

On the upside, S&P 500 must settle above 4015 to have a chance to gain sustainable upside momentum. A move above 4015 will open the way to the test of the next resistance level at the 20 EMA at 4035.

Snap Rallies As Memo Highlights Growth Ambitions

Snap is up by more than 7% today as traders react to the internal memo that was sent by the company’s CEO Evan Spiegel. According to the memo, the company plans to grow the user base to 450 million by the end of the next year.

Gamestop has also enjoyed some support today and made an attempt to settle above the $26 level after the company revealed its new partership with the crypto exchange FTX. Gamestop stock has been under serious pressure in recent weeks, and it remains to be seen whether the new crypto partnership will boost interest in the meme stock.

From a big picture point of view, the market needs additional catalysts to continue its rebound. Most likely, trading will remain highly volatile ahead of the Fed decision, which will be released on September 21. While traders look ready to buy stocks after the major pullback, the hawkish Fed may limit their appetite for risk.

For a look at all of today’s economic events, check out our economic calendar.

JPMorgan To Tokenize US Treasury and Include It in Its Crypto Strategy

Key Insights:

  • JPMorgan aims to leverage the yield-generating potential of mainstream assets.
  • This way, non-crypto assets will find use in the Bank’s DeFi plans.
  • Through institutional DeFi, the bank will impose KYC strictures on crypto’s permissionless lending pools.

The Decentralized Finance (DeFi) space is finding use in the mainstream bank market as well, with JPMorgan planning to leverage DeFi protocols to generate more profit out of non-crypto assets.

JPMorgan’s Institutional DeFi

Firstly discussing their Crypto Strategy during the CoinDesk Consensus 2022, the Head of Onyx Digital Assets at JPMorgan, Tyrone Lobban, stated that the bank has institutional-grade DeFi Plans, which include trillions of dollars worth of tokenized assets it will be making use of.

Iterating the same, Tyrone said,

“Over time, we think tokenizing US Treasurys or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools. The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets.”

In addition to this, the bank will also include tokenized versions of investment management corporation BlackRock’s money market fund shares.

These are basically mutual funds invested in cash and highly liquid short-term debt instruments.

JPMorgan and Crypto

In the past, too, the bank has commented on the future of Crypto, DeFi, and web3 and where it could end up.

As reported by FXEmpire, a few months ago, JPMorgan had predicted that the Metaverse could become a $1 trillion market based on the growth of its individual components, including the price of a parcel of virtual land, strategic partners as well as NFTs.

The same month the bank also stated that the day Bitcoin’s market cap sits at the level of Gold’s market cap, the value of one Bitcoin would be equal to $150k.

Although since then, the king coin has seen more crashes than rallies, so for the next few months, a reach of $150k is out of the question.

The Monetary Authority of Singapore (MAS) to Explore Asset Tokenization

Key Insights:

  • Today, the Monetary Authority of Singapore (MAS) announced the launch of Project Guardian, a collaboration with financial institutions to explore asset tokenization.
  • The Republic of Singapore is one of the more friendly crypto jurisdictions, with the MAS in favor of supporting innovation.
  • Financial institutions involved in the project include JPMorgan Chase and Singapore’s DBS Bank.

Singapore and the Monetary Authority of Singapore (MAS) were back in the news today. A busy 2022 has seen competition amongst key jurisdictions heat up for the coveted spot of being ‘the world’s crypto hub.’

Several jurisdictions have imposed restrictions that limit the expansion of the digital asset space. Others, however, have taken a more innovative stance.

The key, however, remains to find the right balance between appropriate regulatory oversight and embracing innovation.

Singapore and the Monetary Authority of Singapore (MAS) have demonstrated support for innovation. Singapore’s central bank has also ensured the necessary level of oversight across the digital asset space.

Monetary Authority of Singapore Announces Launch of Project Guardian

On Tuesday, the Monetary Authority of Singapore (MAS) announced the launch of Project Guardian.

The MAS will collaborate with the financial industry to look into the value-add and the economic potential of asset tokenization.

Deputy Prime Minister and Coordinating Minister for Economic policies, Mr. Heng Swee Keat, officially launched Project Guardian at the Asia Tech x Singapore Summit on Tuesday morning.

According to the announcement,

“Project Guardian will test the feasibility of applications in asset tokenization and DeFi while managing risks to financial stability and integrity. MAS aims to develop and pilot use cases in four main areas.”

The main areas are,

  • Open, interoperable networks.
  • Trust anchors.
  • Asset tokenization.
  • Institutional grade DeFi protocols.

The announcement went on to say,

“The first industry pilot under Project Guardian will explore potential DeFi applications in wholesale funding markets. The pilot, led by DBS Bank Ltd., JP Morgan, and Marketnode, involves the creation of a permissioned liquidity pool comprising tokenized bonds and deposits. The pilot aims to carry out secured borrowing and lending on a public blockchain-based network through execution of smart contracts.”

MAS Chief FinTech Officer Sopnendu Mohanty said,

“MAS is closely monitoring innovations and growth in the digital asset ecosystem and working through the potential opportunities and risks that come with new technologies – to consumers, investors, and the financial system at large.”

Mohanty went on to say,

“Through practical experimentation with the financial industry and the broader ecosystem, we seek to sharpen our understanding in this rapidly transforming digital asset ecosystem. The learnings from Project Guardian will serve to inform policy markets on the regulatory guardrails that are needed to harness the benefits of DeFi while mitigating its risks.”

JPMorgan and DBS Bank Are no Strangers to Asset Tokenization

JPMorgan launched Onyx in 2020. Onyx is a “multi-asset blockchain network and platform that enables the exchange of value for different types of digital assets.”

Singapore bank DBS offers a range of digital asset services, including crypto trading that supports the trading of bitcoin (BTC) and other major cryptos. DBS also offers institutional-grade digital custody services.

The collaboration with the MAS demonstrates the relationship between established institutions and regulators and how it can benefit the digital asset space.

Japanese Investment Bank Nomura To Launch Bitcoin, Crypto Subsidiary

Key Insights:

  • Reportedly, Nomura is set to launch a crypto arm to offer institutional clients BTC and other digital asset services.
  • The wholly-owned unit will have a staff of a hundred by next year.
  • Nomura executed started trading crypto derivatives last week.

Japan’s largest investment bank Nomura has announced the launch of a new extension focused on cryptocurrencies, decentralized finance (DeFi), and non-fungible tokens (NFTs).

Targeting Institutional Clients

Nomura Holdings, Inc is a Japanese financial holding company and a principal member of the Nomura Group. According to a report from the Financial Times, Nomura is launching a new subsidiary focused on institutional client services for bitcoin and other cryptocurrencies.

Reportedly, Nomura plans to have around 100 people working for the subsidiary by the end of 2022. While the current executives will be primarily responsible for running the company, sources close to the firm have revealed that there are plans for extensive outside hiring.

Just last week, the Japanese investment bank began trading cryptocurrency derivative contracts. This strategic move placed the bank on track with competitors such as Goldman Sachs (GS) and JPMorgan (JPM), giving clients a way to access the cryptocurrency market.

Nomura’s current Chief Digital Officer for its wholesale business, Jez Mohideen, will head the new project. That said, for now, it is reported that fifteen current staff members will be transferred to Nomura’s yet-unnamed crypto company.

Crypto Firms Increase Offerings Despite the BTC Fall

After launching over-the-counter cryptocurrency derivatives with bitcoin (BTC) non-deliverable forwards and non-deliverable options for clients in Asia out of Singapore, the bank has yet again accelerated crypto growth.

Seemingly, despite the recent market volatility and loss in market cap, Nomura has continued to make advancements in the space. The firm also recently announced its first bitcoin futures and options trades on the Chicago-based exchange CME.

Reportedly, the trades were made via Cumberland, the crypto arm of trading firm DRW.

Apart from Nomura, Goldman Sachs and JPMorgan are among other top players that have also been developing their crypto-asset offerings lately.

Best Bank Stocks To Buy In May

Key Insights

  • Many bank stocks are trading near yearly lows. 
  • Meanwhile, analyst estimates for some bank stocks are moving higher. 
  • As a result, bank stocks like JPMorgan and Bank of America are trading at attractive valuation levels. 

Bank stocks have mostly moved together with S&P 500 in recent weeks, so they are trading near yearly lows. Worries about inflation and the potential slowdown of the economy are the key bearish catalysts for the stocks in this market segment. At the same time, earnings estimates for some banks have moved higher in recent weeks, so analysts are not as skeptical as traders.

JPMorgan Chase

JPMorgan stock has recently touched yearly lows near $117.50 and is currently trying to rebound. Analysts expect that JPMorgan will report earnings of $11.03 per share in 2022 and $12.56 per share in 2023, so the stock is trading at less than 10 forward P/E.

Importantly, analyst estimates have been moving higher in recent weeks, while the stock has been moving lower. As a result, the stock is down by more than 20% since the start of this year, which may attract speculative traders who are willing to bet that the major pullback is over.

Bank of America

Bank of America is also trading at less than 10 forward P/E, which is not surprising as the stock has just rebounded from its yearly lows.

As in JPMorgan’s case, the market has completely ignored rising analyst estimates, and Bank of America stock has been under pressure together with the broader market.

At this point, it looks that the market is ready for a weak second quarter in the U.S. economy, while analysts do not believe that this would be the case. If analysts are right, JPMorgan stock would be able to gain sustainable upside momentum in the upcoming months.

For a look at all of today’s economic events, check out our economic calendar.

Rivian Is Down By 15%, Here Is Why

Key Insights

  • CNBC reported that Ford decided to sell 8 million Rivian shares. 
  • The report also indicated that another investor was willing to sell 13 million – 15 million shares. 
  • Rivian’s market capitalization exceeds $20 billion despite the huge pullback from all-time highs. 

Rivian Stock Falls As Ford Is Selling 8 Million Shares

Shares of Rivian gained strong downside momentum after a CNBC report indicated that Ford  would sell 8 million Rivian shares. The shares would be sold through Goldman Sachs. In addition, the report indicated that an unknown seller would be selling 13 million – 15 million Rivian shares through JPMorgan.

Ford owns 102 million shares of Rivian, so the automaker decided to sell about 8% of its current stake in the EV company. Rivian stock had a great debut in late 2021 and touched highs near the $180 level but lost momentum and has been declining for months.

Not surprisingly, traders rushed to sell Rivian stock after the CNBC report was released. The general bearish market sentiment added to pressure, and the stock moved below the $25 level.

What’s Next For Rivian Stock?

The current market environment is bearish for stocks like Rivian. The company is not expected to become profitable anytime soon, while the market is focused on finding safe-haven plays in the rising interest rate environment. In addition, analyst estimates for Rivian have been declining in recent months.

Ford’s decision will certainly serve as a major red flag for many investors, and the stock could remain under strong pressure in the upcoming trading sessions. The CNBC report indicated that Ford was not the only company that was willing to sell shares, which will increase traders’ concerns.

It should be noted that Rivian is valued at more than $22 billion even after the huge pullback. The company has not reached mass production levels, and it remains to be seen whether the market is willing to support such enterprises in the current environment. While the pullback from $180 to $25 may look like a great opportunity to buy Rivian stock, traders must stay cautious as Rivian remains a richly valued company.

For a look at all of today’s economic events, check out our economic calendar.