Market Wrap: Bitcoin Holds Strong Above $19.5K as Investors Chew Over Latest Price Data

Price Action

Bitcoin (BTC) was recently trading at about $19,500, up about 0.3% over the past 24 hours in choppy trading. Prices jumped sharply during the 14:00 UTC (10:00 a.m. ET) time frame and even cracked the $20,000 threshold shortly after a speech on global financial stability by U.S. Federal Reserve Vice Chair Lael Brainard. BTC then retreated to a range between $19,500 and $20,000 in the subsequent hours but experienced a sudden sell-off right before the U.S. equity market close.

Brainard reiterated the Federal Reserve’s commitment to taming inflation, even at the expense of a hard economic landing. “Inflation is very high in the United States and abroad, and the risk of additional inflationary shocks cannot be ruled out,” she said at an event in New York.

Ether’s (ETH) price recently rose to about $1,340, a 0.4% gain from the same time the previous day. The trading volume of the second-largest cryptocurrency by market capitalization was down 2.3%. Its return on investment (ROI) has fallen 13% in the past 30 days as equity markets wrapped up the third quarter.

The CoinDesk Market Index (CMI), a broad-based market index that measures performance across a basket of cryptocurrencies, rose 0.76%.

“It's been a very choppy week in bitcoin, which has failed to make a sustainable run in either direction despite attempts at both,” Oanda Senior Analyst Craig Erlam wrote in an email, although he noted that bitcoin seemed to be forming a floor “a little shy of the early summer lows around $17,500.”

“I keep using the word resilience when discussing bitcoin and that has very much remained the case,” he wrote, adding: “Perhaps a period of stability is what it needs.”

Economic calendar

The core personal consumption expenditure (PCE), the Federal Reserve's preferred measure of U.S. inflation, was hotter than expected in August, rising 4.9% on a year-over-year basis after increasing 4.7% in July.

Looking ahead, the Manufacturing Purchasing Managers Index (PMI) for September issued in the U.S. and the U.K. will be released on Monday. The indexes will offer the latest evidence of manufacturing activity in both countries and the direction of their economies, which now seem to point to a sharper economic slowdown than their central banks had been hoping.

U.S. equities

U.S. equities slogged through a dreary day, with the tech-heavy Nasdaq, the S&P 500 (which has a heft technology component) and Dow Jones Industrial Average (DJIA) declining 0.8%, 0.9% and 1.2%, respectively. The personal consumption expenditures (PCE) index results for August, released Friday, spooked investors already fretting about high inflation.

The PCE, which excludes energy costs, is a widely watched measure of price trends. Stocks have fallen steadily downward this year, with the DJIA this week becoming the latest index to fall into bear market territory, meaning it has fallen at least 20% from its previous high.

Commodities

Gold ticked down a fraction of a percentage point, continuing a recent trend. The traditional safe-haven investment has been swept up with riskier assets and is trading at about $1,661, a more than 14% drop over the past six months.

Brent crude oil, a widely watched measure of energy markets, was selling at about 85% per barrel, up slightly, although investors remain nervous about energy prices amid threatening remarks by Russian President Vladimir Putin and the possible widening of Russian military aggression beyond Ukraine.

Latest Prices

● Bitcoin (BTC): $19,388 −0.1%

● Ether (ETH): $1,334 +0.2%

● CoinDesk Market Index (CMI): $964 +0.6%

● S&P 500 daily close: 3,585.62 −1.5%

● Gold: $1,670 per troy ounce +0.7%

● Ten-year Treasury yield daily close: 3.80% +0.06

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Technical Take

Quant Network Token Leads Weekly Gainers

By Lyllah Ledesma

The token, QNT, of Quant Network, a multi-faceted blockchain platform that facilitates the development of central bank digital currencies among its users, was the top-gaining cryptocurrency over the past week. QNT was recently trading at about $143, a roughly 27% increase over the past seven days.

The increase comes as U.S. and foreign agencies wrestle with a vast array of cryptocurrency regulatory issues, including stablecoins and central bank digital currencies.

Last week, as CoinDesk reported, U.S. House Democrats hashing out the details of this year's stablecoin regulation bill pushed for a provision directing the Federal Reserve to move forward on a digital dollar, but the negotiations settled instead on another Fed study. Even that compromise is on uncertain ground as the legislation hasn't yet been issued publicly.

The draft of the House bill, which is now circulating among lawmakers and the industry, won’t yet represent the authorization Fed officials have said they are waiting for from Congress before they decide to issue a central bank digital currency (CBDC). The federal government has been inching closer to such an approval, with the U.S. Treasury Department recommending in a recent report that work on a digital dollar should continue while the executive branch also comes to a decision.

Noting Quant’s CDBC business, Crypto Finance AG sales trader David Scheuermann wrote in a note that “it's no secret that governments are pushing to crack down on current stablecoins, and exploring their own digital currencies, CBDCs.”

He added: “These recent political developments have sparked rumors of central banks adopting Quant Network’s overledger technology for CBDC developments,” said Scheuermann.

Altcoin Roundup

• Cryptocurrencies XRP, MKR Shine as BTC, ETH Hold Steady Ahead of US Inflation Figure: Payments-focused cryptocurrency XRP climbed above its 200-day moving average while maker (MKR) hit a three-week high. A higher-than-expected figure for the core personal consumption expenditures index, the Federal Reserve's preferred measure of inflation, may inject volatility into markets. Read more here.
• Fintech App Eco to Convert User Balances From US Dollars to USDC: Eco will use digital settlement-service platform Zero Hash to custody the stablecoins. Read more here.

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CoinDesk Market Index

Biggest Gainers

Asset Ticker Returns DACS Sector Terra Luna Classic LUNC +7.54% Smart Contract Platform Quant QNT +5.76% Currency Bitcoin Cash BCH +4.94% Currency

Biggest Losers

Asset Ticker Returns DACS Sector Ethernity Chain ERN -12.35% Culture & Entertainment Badger DAO BADGER -6.73% DeFi Celsius CEL -5.24% Currency

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.