First Mover Asia: Santa Claus Rally Sends Bitcoin North of $50Ok

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(Edited by James Rubin)

Good morning. This is what happens:

Market Movements: The crypto market is cheering for a “Santa rally” as Bitcoin surpassed a key price level of $ 50,000.

Technician’s Take (Editor’s Note): Technician’s Take is on vacation. In his place, First Mover Asia is publishing the third in a series of stories about the year in the cryptocurrency markets by CoinDesk market analyst Damanick Dantes and Markets Managing Editor Brad Keoun.

Watch the latest episodes of CoinDesk TV for insightful interviews with leaders in the crypto industry and analysis.

Prices

Bitcoin (BTC): $ 50,691 + 3.9%

Ether (ETH): $ 4,104 + 2.8%

Markets

S&P 500: $ 4,725 + 0.6%

DJIA: $ 35,950 + 0.5%

Nasdaq: $ 15,653 + 0.8%

Gold: $ 1,808 + 0.2%

Market movements

Bitcoin, the largest cryptocurrency by market cap, surged above $ 50,000 on Thursday for the first time since December 13. The major US stock indices also rose amid improving US consumer sentiment in December.

Trading volume, meanwhile, was low two days before Christmas. Data compiled by CoinDesk showed that the trading volume of Bitcoin on the major centralized exchanges was only slightly higher than it was a day ago.

Other cryptocurrencies followed Bitcoin’s upward trajectory, with the price of ether rising to over $ 4,100 on Thursday, up over 3% in the past 24 hours.

Crypto Twitter cheered a so-called Santa rally for Bitcoin. The oldest cryptocurrency by market capitalization struggled to surpass $ 50,000 for more than a week, while other alternative cryptocurrencies (altcoins) like LUNA and MATIC soared to record highs.

Market closing at the end of the year

Market Wrap Year In Review: Bitcoin Peaks As Coinbase Goes Public: Tesla’s Bitcoin adoption helped push BTC price to an all-time high of nearly $ 65,000 in April, which was almost unthinkable just a few months earlier . Coinbase’s direct listing marked the exact date of the market top. ((by Damanick Dantes and Brad Keoun)

Hello Market Wrap Readers! In the final two weeks of 2021, we use this space to recap the most dramatic moments of the year in the cryptocurrency markets – and highlight key lessons from this rapidly evolving corner of global finance. In a series of eight posts starting December 20th and running through December 30th, we’ll recap what rocked the crypto markets this year. (For the latest digital asset prices and headlines, please scroll down.)

In the episode on Tuesday, we documented the social media craze that fueled the price rallies for Bitcoin and Dogecoin in January and February. Today we show how Tesla’s stake in Bitcoin drove prices even higher in February and March. There was hype and exuberance leading up to the US cryptocurrency exchange Coinbase’s direct listing in April, but the rally quickly fizzled out.

From Tesla to Coinbase, Bitcoin went up, then down

Bitcoin price soared over $ 50,000 in February after Tesla announced it had invested $ 1.5 billion in BTC.

The market reaction sparked a bit of opportunism from an enterprising t-shirt company, who hurried to sell a t-shirt with the words “Elon’s Candle” for $ 19.99, referring to billionaire electric vehicle maker Elon Musk. The “candle” referred to the dramatic pattern that appeared on Bitcoin’s price chart as a result of the price slam fueled by Musk:

Elon's Candle T-Shirt (The Doge Store)

In March, Musk fueled the drama with a tweet saying that consumers “can now buy a Tesla with Bitcoin”.

You can now buy a Tesla with Bitcoin

– Elon Musk (@elonmusk) March 24, 2021

The announcements helped propel Bitcoin, the oldest cryptocurrency, towards a previously unthinkable market cap of $ 1 trillion for the first time.

But from the perspective of a professional price chart reader, Bitcoin appeared to be “overbought”; the term meant that the market run-up had likely gone too far, too fast, and not justified by the underlying buying interest in the new, heightened threshold.

Bitcoin fell again, falling back to its 50-day moving average of around $ 30,000. Apparently it was a level where buyer interest seemed to be growing again.

The market stabilization provided a signal to traders: Bitcoin appeared to hold up above the price it started at in 2021, at $ 29,112. That gave rise to renewed optimism.

So when headlines in traditional financial media and breathless commentators began to highlight the upcoming direct listing of Coinbase, the largest U.S. cryptocurrency exchange, the Bitcoin rally resumed.

The price would more than double in the coming months, a reminder of how volatile cryptocurrency markets can be.

Bitcoin daily price chart (Damanick Dantes / CoinDesk, TradingView)

Coinbase goes public

Coinbase CEO Brian Armstrong speaks on CNBC on Wednesday.  (Screenshot, modified by CoinDesk)

On April 14th, Coinbase, the largest US cryptocurrency exchange, went live with its direct listing on the Nasdaq exchange under the ticker symbol COIN.

“This is a turning point for the digital asset industry as it means a greater moment of credibility for a rapidly maturing market,” said Hunter Merghart, US chief executive of rival cryptocurrency exchange Bitstamp, in an interview with CoinDesk.

The COIN stock’s initial trading price was $ 381 an impressive 52% above the reference price of $ 250 per share posted by Nasdaq the day before. But even that high price level was well below some of the price targets recently released by stock analysts, with some estimates going as high as $ 600 per share.

The failure of COIN stocks to soar any higher suddenly seemed to be, well, deflation for a crypto market that had become accustomed to ever-increasing prices.

By the end of the first day of trading, COIN’s share price had fallen to $ 342.

I used to want to buy $ COIN for $ 250 but didn’t. Probably a good idea as it will likely drop below $ 200 in the next few weeks.

– Sauce (@RichBankerDude) April 14, 2021

The dwindling sentiment spilled over into the bitcoin market: it turned out that the cryptocurrency exchange’s much-anticipated public trading debut was not enough to sustain BTC’s two-fold price increase in recent months.

Bitcoin stalled near an all-time high of around $ 64,800 on April 14 and quickly slipped into a sharp sell-off. The chart below shows slowing price momentum, which is defined by lower highs in the daily relative strength index (RSI), which typically precedes a price decline.

Bitcoin daily price chart (Damanick Dantes / CoinDesk, TradingView)

The eagerly anticipated direct COIN listing was, after all, a classic “buy the rumor, sell the fact” event. In hindsight, Coinbase’s IPO date would coincide with Bitcoin’s high.

For seasoned crypto traders as well as newbies, the episode offered a new lesson on how even sky-high price predictions, euphoric rallies, and milestones like Coinbase’s direct listing will eventually face the reality of volatile and notorious cryptocurrency markets, and down-to-earth reviews.

Important events

1 p.m. HGT / SGT (5 a.m. UTC): Start of construction in Japan (Nov. YoY)

1 p.m. HGT / SGT (5 a.m. UTC): Japan construction contracts (Nov. YoY)

Christmas Eve!

CoinDesk TV

In case you missed it, here are the latest episodes of “First Mover” on CoinDesk TV:

Square CEO Jack Dorsey at War with Andreessen Horowitz Co-Founder Over Web 3 Debate, Top Crypto Predictions for 2022

The “First Mover” hosts asked CoinList CEO Graham Jenkin about the most important crypto forecasts for 2022 and spoke to Youbi Capital CEO Chen Li about crypto market research.

Last read

India’s crypto law might not be ready before May, sources say: The country’s bill is unlikely to go into effect until after the end of next year’s budget session in April, adding to uncertainty about the state of crypto regulation in the nation.

Consultants enter the metaverse – literally: SAND tokens were in circulation when it became known that PwC Hong Kong is acquiring land from LAND in The Sandbox.

Bakkt President Adam White announces his departure: The founder is leaving the Bitcoin company on Wall Street. Where to go next is unclear.

Telegram CEO supports TON blockchain spin-off Toncoin: For the first time since Telegram gave up TON in 2020, CEO Pavel Durov has supported one of the competing spin-off projects.

Jack Dorsey continues to follow the Web 3 Beef frenzy: Marc Andreessen, Brian Armstrong and Tyler Winklevoss have been removed from the Twitter founder’s timeline.

Read longer

Web 3 is a return to the wild spirit of the internet: “I think that’s what the audience wants, right?” Author and founder of the freelance payment system OutVoice, said Matt Saincome.

Today’s Crypto Explainer: Who Created Ethereum?

Other Voices: Crypto Is Getting Its Day With Congress (New York Magazine)

Said and heard

“Scrooge Injection.” (Bloomberg analyst Eric Balchunas) … “The fact that the SEC is disapproving faster than necessary – we were optimistic about the future, but we are not confident that 2022 will be approved.” (Balchunas) … ” The VCs are the problem. ”(Block CEO Jack Dorsey on Twitter) … Don’t get upset about your crypto losses. Losses happen to every investor. Instead, think about how you can implement those losses and keep applying your newfound knowledge to future crypto investment plans. (TaxBit VP of Marketing Michelle O’Connor in a CoinDesk op-ed) … “Omicron looks more like a short-term disruption to the economic outlook than a destructive headwind that could throw the economy off track.” (MarketPulse analyst Ed Moya) … “This is a great opportunity.” (Michelin-starred Chef Floriano Pellegrino at the launch of his Let’s Make Out NFT) … “Amazing that Ethereum is still by far the leading NFT Platform is increasing 30d sales while lower cost alternatives have declined. It doesn’t seem to be all about costs – data from @cryptoslamio. ”(Genesis Trading Head of Market Insights Noelle Acheson, a CoinDesk alum who now works for the CoinDesk sister company)

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