First Mover Asia: Bitcoin, Ether Continue Their Rapid Descent in Volatility

Good morning. Here’s what’s happening:

Prices: Bitcoin holds steady at $16,800 amid ongoing concerns about the economy and central bank hawkishness.

Insights: Bitcoin and Ethereum’s Average True Range has declined by more than 80% since 2022.

Bitcoin Continues Its 2022 Nostalgia Tour

By James Rubin

Bitcoin and ether continued their 2022 nostalgia tours, with the two largest cryptos by market capitalization holding almost precisely where they stood for the last two weeks of December.

BTC was recently trading at about $16,850, flat over the last 24 hours as investors mulled early 2023 economic indicators that seemed at odds and ongoing U.S. central bank resolve to raise interest rates for at least the first part of 2023. Ether followed a similar pattern to trade at just above $1,200, its perch on Wednesday, same time. Other major cryptos also spent much of Wednesday hovering within their most recent ranges.

ADA, the token of the Cardano blockchain, was recently up 1.8%. The CoinDesk Market Index (CDI), an index measuring cryptos’ performance, recently inched down 0.19%.

In an interview with CoinDesk TV’s First Mover program, Katie Stockton, managing partner of research group Fairlead Strategies, noted the “downtrend” in bitcoin and altcoins. “Since May or so we’ve seen them stair step lower,” Stockton said. “Right now, we’ve seen a bit of a plateau. They seem to end with a few days of downside volatility. And then we get into another consolidation phase, the likes of which we’ve seen over the past seven to eight weeks.”

She added: “Now, within that context, with the consolidation phase underway within the downtrend, we’ve obviously not seen any kind of breakouts above resistance.”

On the third trading day of the new year, equity markets slumped with the tech-focused Nasdaq falling 1.5% and the S&P 500 and Dow Jones Industrial Average (DJIA) dropping 1.2% and 1%, respectively – reaction to a surprisingly strong report by human resources software and services provider ADP showing employers adding $235,000 jobs in December. The monthly measure of employment markets rekindled fears that the economy was not slowing as much as U.S. central bankers had hoped and undercut hopes stirred by a U.S. Labor Department report showing a slight downturn in overall, available jobs.

Job cuts highlighted crypto news on Thursday. Crypto bank Silvergate Capital (SI) cut 40% of its staff, or about 200 employees, the company said in a filing with the U.S. Securities and Exchange Commission, and beleaguered Genesis Global trading, a subsidiary of crypto conglomerate Digital Currency Group (CoinDesk’s parent company) eliminated about 30% of its workers, taking it down to 145 employees, according to a person familiar with the matter.

Fairlead’s Stockton said warily that her group’s research strongly suggested that the current consolidation in crypto markets would “resolve to the downside.”

“We’re not advocating counter trend positions, given the risks inherent to bear market cycle(s),” Stockton said, adding: “We’re out there kind of with you looking for signs of a long-term bottom as sort of a major low, and we actually do think that this year will capture a major low, but we just don’t have it indications of it quite yet.”

Bitcoin and Ethereum’s Decreased Volatility

By Glenn Williams Jr.

Bitcoin continued its sharp decline in volatility.

Bitcoin’s Average True Range (ATR), a proxy for measuring volatility in asset prices, has fallen to its lowest point since July 2020.

An asset’s “true range” incorporates its open, high, low, and “closing” price, with the range of the asset representing the absolute value of the largest move between components. A moving average is then calculated over a prescribed time (often 14 days) to determine the ATR.

Bitcoin’s ATR has declined by 88% from its 2022 peak of 2,569, and more than 95% from its all-time peak.

Ether volatility has responded similarly, with its 2022 ATR falling by 84%.

9:00 a.m. HKT/SGT(1:00 UTC) Eurozone Core Harmonized Index of Consumer Prices (YoY/Dec.)

12:30 p.m. HKT/SGT(4:30 UTC) United States Nonfarm Payrolls (Dec.)

2:00 p.m. HKT/SGT(6:00 UTC) United States ISM Services PMI (Dec.)

In case you missed it, here is the most recent episode of “First Mover” on CoinDesk TV:

What House Speaker Impasse Means for Crypto; CES 2023 Goes Into the Metaverse

From Las Vegas at CES,” First Mover” host Christine Lee kicked off CoinDesk’s coverage of the largest tech conference of the year. CoinDesk’s Pete Pachal gave a preview. Also, as the U.S. House of Representatives struggles to elect a speaker, how could the outcome impact this year’s crypto agenda in Washington, D.C.? Ron Hammond, Director of Government Relations at the Blockchain Association, shared his predictions. Plus, bitcoin is still trading flat, but for how long? Katie Stockton, Founder and Managing Partner of Fairlead Strategies, provided her crypto markets analysis.

Crypto Lender Genesis Lays Off 30% More of Its Staff: The job cuts come a day after the company said it would be “reducing costs and driving efficiencies” amid a challenging environment for crypto companies.

Shopify Merchants Can Now Design, Mint and Sell Avalanche NFTs: The new integration streamlines the NFT process for buyers and sellers.

Declining Demand for Binance’s BUSD Represents New Chapter in Stablecoin Wars: The largest crypto exchange’s Binance USD stablecoin endured $5.5 billion net redemptions in a month amid concerns about Binance. Top rivals USDT and USDC picked up market share.

CME Crypto Trading Volume Slumped to 2-Year Low in December: Poor market sentiment and an extreme lack of volatility were the likely culprits behind the declines.

Former Celsius CEO Mashinsky Sued by New York State for Defrauding Investors: New York Attorney General Letitia James filed the suit against the ex-head of the failed lending platform, accusing him of misleading investors about the firm’s health.