With the $1.9 trillion stimulus package on the line in today’s U.S. House vote, markets seem to be a bit wary of the outcome. Bitcoin is facing increased bearish pressure the $45,000 support level threatens to be broken and with that establish a downward trend. EURUSD and Gold battle against a strong USD as well as an increase in the U.S. Treasury yields ahead of important economic news out of the U.S. as well as the results of the vote. With that said, let’s find out how the markets are doing on February 26th, 2021.
On Feb 22, the price of Ethereum crashed to $700 on Kraken. It now emerges that the flash crash wasn't a mistake. Instead, a whale exiting his position, consequently dumping his life savings. The exchange is still investigating though the founder said its order matching engines remain functional. Even though prices momentarily dipped, the situation could have been exacerbated if they supported margin trading and other derivatives. Ethereum prices are steady but under pressure. Meanwhile, Gas prices have nearly halved to around $20, a relief for DeFi and traders.
The USD spiked in the early N.Y. session on Feb 15, registering gains versus the majors, as treasury yields continue to rise. Subsequently, Emerging Market currencies posted notable losses. Meanwhile, the VIX reading swung to fear, and major indices led by NASDAQ and the S&P 500 declined.
Stone Ridge, the New York-based asset manager, will from April begin buying Bitcoin, filing at the United States Securities and Exchange Commission (SEC) shows. Bitcoin now becomes their seventh strategy in its diversified alternatives fund. They will focus on options for indirect exposure to Bitcoin. Stone Ridges is looking to diversify away from Bonds and stocks to high-performing assets like alternative lending, single-family real estate, and Bitcoin.
The markets are starting to show some increase in the risk-on sentiment with the vaccine fueled optimism making the rounds around markets. Bitcoin is consolidating for the time being, but there seems to be enough bullish pressure mounting that will allow it to attempt another break higher. EURUSD is also benefiting on the expense of the USD which falls as safe-haven assets get offered. Same goes for Gold, which continues to fall as investments in riskier assets are making things harder for the precious metal. With that said, let’s find out how the markets are doing on February 25th, 2021.
Michael Saylor, the CEO of the business intelligence firm, MicroStrategy, has revealed that his firm has purchased $1 billion more worth of Bitcoin. This takes their total ownership to 90,531 BTC translating to approximately $2.171 billion of Bitcoin at spot rates. Following this acquisition, the NASDAQ-listed firm is now the largest public company holding the digital asset, ahead of Square. On Feb 23, Square purchased another $170 million of Bitcoin pushing their total ownership of digital gold to $220 million, or slightly five percent of their cash, cash equivalents, and market securities as of the end of Q4 2020.
The RBNZ, the central bank of New Zealand, maintained interest rates at 0.25 percent as expected and didn't decrease bond purchases and other interventionist measures to absorb global shocks. Meanwhile, the BoE is not fazed by inflation talks, brushing off suggestions that the economy could overheat as they struggle with the coronavirus pandemic's effects. The two central banks' confidence saw their respective currencies edge higher versus the USD that slid in the New York session.
Leading indices in the United States rose, shaking off losses of Feb 24, led by a recovery of tech stocks. In the last few weeks, the exit from high-performance tech and rotation into value stocks has picked up steam. Notably, stocks decimated due to coronavirus are now attracting capital from value investors. They anticipate a more substantial recovery in 2021. Because of this, the retracement of consumer-facing and I.T. sector stocks are fueling the growth of energy, industrial, manufacturing, and financial stocks.
Powell’s comments have really moved the markets as the dovish comments really came out of left field on this one. Bitcoin fell heavily after it’s failure to continue the bullish momentum which led it towards the $45,000 support level, before moving higher. EURUSD and Gold both seem to be indecisive about their next leg of the journey, despite the dovish comments from Powell as other factors are coming into play. With that said, let’s find out how the markets are doing on February 24th, 2021.
By Feb 23, $2.86 billion of BTC longs had been liquidated. However, news of the New York Office of the Attorney General (NYOAG) settling with Tether Limited—the official issuer of USDT, for $18.5 million came as a welcomed relief for bulls. After months of higher highs, it was only natural for prices to recoil in a pullback that shakes off weak hands, allowing whales to snap Bitcoin for cheap. The plunge to $48k on Feb 23 saw $2.86 billion of leveraged longs across multiple crypto exchanges, mostly Binance, closed in a market calibration.
FED Chair Jerome Powell failed to guide monetary policy during his Senate Banking Committee hearing on Feb 23. This, however, didn't prevent gold prices from inching higher, building on Monday's gains, albeit with lower trading volumes. The yellow metal's prices are holding up at around $1.8k, propped by relatively low demand for high-risk equities but capped by steady treasury yields and a firmer USD.
The greenback, on Feb 23, slid following comments from the U.S. FED Chair's comments that economic recovery is uneven and far from complete against investor's expectations. On his first day of testimony before Congress, Jerome said the pace of economic growth is dependent on the effects of the coronavirus and the implementation of mitigation measures. Consequently, the central bank is ready to use all tools at its disposal to attain full employment and the inflation target of two percent.
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