Daily News | Crypto Market Cautious Optimism Amid US Inflation Concerns and Soros Fund Management's Heavy Investments

2023-02-15, 01:48

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## Crypto Daily Digest: Resilient Cryptocurrency Markets Continue Despite Regulatory Pressure, Market Downtrend, and Concerns About Long-Term Inflation

Good morning traders! I trust that everyone enjoyed a pleasant Valentine's Day. As we have arrived at the midpoint of the week, let's seize this Wednesday and make the most of it! 🚀

On Tuesday, the S&P 500 remained mostly unchanged, while the Nasdaq 100 increased by 0.7% in response to predictions that interest rates will rise above 5%. Officials are contemplating additional interest rate hikes to manage inflation as consumer prices rose by 6.4% in January, exceeding the Fed's 2% inflation goal. Some officials think they may have to raise interest rates more than expected, but opinions are divided on when to halt interest rate hikes.

Investors on Wall Street are rethinking their approach to stock trading as inflation may exceed the Fed's 2% target for a longer period. Some market experts suggest that the target should have been 3% to 4%, while the Fed is committed to the 2% target. Professor Kenneth Rogoff of Harvard and Mohamed El-Erian, chairman of Gramercy Funds, anticipate the Fed raising rates for a while, which could lead to lower asset prices.

<a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s price initially fell following the January consumer price index (CPI) report before rebounding above $22,000. The crypto Fear and Greed Index has remained neutral, reflecting cautious <a href="/ar/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> regarding inflation and the economy. <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s trading range has had a greater impact on its price movements than data releases, with its daily time frame displaying a moderate increase and stable prices throughout the day, despite the CPI report.

The broader crypto market is concerned about <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s downtrend, which recently fell below its $22,500 support, possibly due to regulatory pressures, particularly in the United States. Demand for Asia-based stabl<a href="/ar/price/ecoin-ecoin" target="_blank" class="blog_inner_link">Ecoin</a>s is decreasing, as shown by the <a href="/ar/price/usd-coin-usdc" target="_blank" class="blog_inner_link">USD Coin</a> premium, and professional traders are in negative positions since the futures premium abandoned the neutral-to-bullish range, indicating a bearish trend. Regulatory uncertainty is causing fear, uncertainty, and doubt, making professional traders risk-averse, and the odds are currently favoring bears.

## Topic of the Day: Hedge Fund Giant George Soros' Investment Arm Takes Up Positions in Marathon Digital, MicroStrategy, and Silvergate Bank

The recent moves by Soros Fund Management, which is the investment arm of hedge fund billionaire George Soros, have drawn attention in the crypto market. According to a 13F filing with the US Securities and Exchange Commission (SEC), the fund has invested heavily in the crypto space in the form of convertible debentures, call and put options, and short positions.

The filing indicates that Soros Fund Management purchased $39.6 million worth of convertible debentures of Marathon Digital Holdings, a crypto mining company. Convertible debentures are long-term debt instruments that can be converted into stock after a specified period of time. The exact nature of the trades is not clear, but it is believed to be a hedging strategy on MicroStrategy shares through an option play.

The fund's ownership of call and put options on 50,000 shares of MicroStrategy has also raised eyebrows. The company is considered a proxy for holding <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> due to its large crypto holdings. A put option gives the buyer the right to sell while a call option gives the buyer the right to buy, but not the obligation to do so. The bet is likely a hedging strategy on MicroStrategy shares through an option play.

In addition to the common stock bets/hedges, Soros Fund Management disclosed a short position on Silvergate Bank, holding 100,000 shares worth of put options. The filing being as of the end of 2022, it's unclear now whether Soros Management remains short Silvergate. The exact nature of the trades is not clear, but it is likely a short-term trading strategy on the beleaguered crypto-focused bank.

It's worth noting that Soros Fund Management has been reported to own <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> in the past. The moves by the investment firm are significant, given Soros' status as a legendary investor with a long history of making big bets in the financial markets. The 13F filing gives a glimpse into the fund's holdings at the end of last year, but it's important to note that the situation may have changed since then.

Overall, the latest moves by Soros Fund Management suggest that the legendary investor is still interested in the crypto space despite the recent regulatory crackdown and market downturn, unlike legendary investors Warren Buffet and Charles Munger. The moves may also inspire other big investors to consider adding exposure to the crypto market.

## <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) $22,147 (-0.24%) - Neutral Outlook

**Overview:**

- ***Closest daily support zone: 21,772 - 21,480***
- ***Closest daily resistance zone: 22,320 - 22,784***
- ***Key Level: 21,388 (78.6% Monthly Fibonacci Retracement From Oct. 2020 - Mar. 2021)***

![](https://gimg2.gateimg.com/image/article/1676425671Untitled0215.png)

On Tuesday, despite falling 1.4% or $300 from $21,837 within a minute after CPI data release, BTC remained resilient and quickly regained all of its losses and more 1.5 hours later. On the daily timeframe, the rebound was noticeably bullish due to the forming of a bullish engulfing candle, possibly indicating the short-term uptrend will continue into Wednesday. However, the RSI indicator shows potential resistance at the 14SMA, which translates to a potential rejection from the supply zone between $22,397 - $22,384. On the other hand, if we’re able to close within the supply zone, and with RSI exceeding the 14SMA, there’s a likelihood BTC will trend higher and retest $24,000.

**Daily Resistance zones**

1. 22,320 - 22,784
2. 22,962 - 23,348
3. 23,470 - 24,000

<br>
 **Daily Support zones**

1. 21,772 - 21,480
2. 21,300 - 21,128
3. 20,505 - 20,228

<div class="blog-details-info">
<div>Author:** Peter L.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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