Daily Flash | Traders Eye US Economic Data As Broader Market Continues To Exhibit Bearish Sentiment: Inflation, Fed Chair Speech, Nvidia Q2 Earnings

2022-08-22, 09:15

Today's Headline - Galaxy Digital Report Claims Bored Apes, Moonbirds Have 'Misled' Buyers on NFT IP Rights

A new research report by Galaxy Digital, titled “A Survey of NFT Licenses: Facts & Fictions”, states that many NFT projects have “misled” holders on claims relating to copyrights. The report concludes by stating that the "vast majority of NFTs convey zero intellectual property ownership" to their owners.

In particular, the report highlighted two major NFT projects in its study- Bored Ape Yacht Club (BAYC) and Moonbirds. With regards to BAYC, the report criticises the conflicting nature of Yuga Labs ‘Terms and Conditions’ section which grants NFT holders ownership of the underlying BAYC artwork, but withholds the copyright to it.

Coming to the Moonbirds project, the report cited the projects claims that holders ‘owned’ the IP and how its recent decision to move the project towards CC0 licensing. The report reads,

“The fact that Proof can unilaterally change the terms of its license, and did so, is further proof that Moonbirds NFT holders did not, in fact, ‘own the IP.’”

Chart of the Day - Bitcoin Transfer Volume By Size: Glassnode Report

The relative volume of Bitcoin transfers is now dominated by large transactions. Indeed, 63% of all onchain volume is made up of transactions of $10 million or more. This momentum has been steadily increasing since the second half of 2020.

As of this writing,
Bitcoin (BTC) is changing hands at around $21,293, up 0.68% in the past 24 hours,
while Ether (ETH) is trading at $1,580, or down 0.37% during the same period.
Major altcoins are also trading in the red, with Cardano (ADA) down by 1.96%, Solana (SOL) -0.16%, Polkadot (DOT) -2.48%, and Avalanche (AVAX) -2.72%, and Cosmos (ATOM) -0.81%.

Notable gainers include:
Wrapped Nexus Mutual (WNXM) at $24.12 (+46.49%),
XYO (XYO) at $0.00865 (+18.49%),
Tribe (TRIBE) at $0.195 (+15.72%).

Notable losers include:
Celsius Network (CEL) at $2.17 (-15.14%),
NKN (NKN) at $0.113 (-9.88%),
Unifi Protocol DAO (UNFI) at $8.13 (-9.54%).

On Friday, the entire crypto market saw a steep decline, with Bitcoin (BTC) down by 10.17% and Ether (ETH) down by 12.85% on a single daily candle.

This week, all eyes are on another set of economic data due for release in the U.S. The Kansas City Federal Reserve will host its annual economic symposium in Jackson Hole this week, with Friday morning's speech from Fed Chair Jerome Powell expected to highlight the proceedings as investors search for clues on the central bank's next move.

In addition to Powell's speech, updates on service sector activity, inflation, and consumer sentiment will feature on the economic calendar. PCE inflation — the Fed's preferred measure — is set for release at 8:30 a.m. ET on Friday, just 90 minutes before Powell's speech. Powell's speech will begin simultaneously with the release of the University of Michigan's latest consumer sentiment index.

Notably, Nvidia is expected to report its Q2 earnings this week, which comes at a crucial juncture for the semiconductor industry, often seen as a bellwether for global economic demand. Earlier this month, Nvidia warned its quarterly results would miss estimates, and reports this week catalogued the growing concerns around demand in the chip space as global economic activity appears to soften.

In terms of the technical outlook of BTC, the weekends faired slightly better since traders have found temporary footing at the $21,000 psychological level which forms a support zone along with the Jul. 26 low of $20,712.

BTC was up by 3.26% by Sunday EOD at $21,515, before coming back down on Monday. As of this writing, BTC was trading at 21,232 (-1.33%) over the past 24 hours.
The bears will likely attempt to push the price below the current support zone, if this happens, we can expect the next support zone to form between the monthly support level at $19,858 and $18,975 which has been a strong daily support level between Jun. 18 - Jul. 13.

Notably, the 127.2% - 141.4% Fibonacci extension levels (drawn from Aug. 13 - 19) also reinforce the likelihood of the aforementioned support zone.

If the bulls are unable to hold above the current support zone but are able to hold above the $19,858 monthly support level, then we may see a slight rebound to the psychological level of $21,000.

The bulls will have to show strength at the monthly support level in order for more buying power to come in to push towards the 23.6% Fibonacci level ($22,350) measured from Mar. 28 - Jun. 18.

Ether (ETH), on the other hand, failed to sustain above the weekly resistance level at $1,611 over the weekends.

The closest support level appears to be the 38.2% Fibonacci level ($1,500) measured from Apr. 3 - Jun. 18, which forms another support zone with a monthly support level of $1,428. If the bears manage to push the price below this zone, the price of ETH will likely plunge towards $1,300, to a possible low of $1,250 in the short term.

The bulls will have to show strength at the monthly support level of $1,428 for any signs of a slowdown in decline. The likelihood of ETH reversing to the bulls’ favor seems quite unlikely at this point, but we can expect a rebound above the 38.2% Fibonacci level.

Influencer of the Day - Developers, family protest arrest of Tornado Cash developer in Amsterdam: CoinDesk Report

Alex Pertsev, a 29-year old involved in developing the crypto-mixer service Tornado Cash was arrested Aug. 12 by Dutch authorities on suspicion of fraud, environmental crime and asset seizure. Days earlier, the U.S. government barred Americans from using Tornado Cash, citing North Korean hackers’ use of the tool to launder stolen cryptocurrency.

While crypto mixers aren’t illegal, they provide anonymity in making transactions, which bad actors have used to launder funds gained illicitly. That raises the question of whether the developers behind these projects merit prosecution.

On Wednesday, Finnish product manager Daria Mironova created a Change.org petition to raise awareness around the reasons for the arrest. As of Monday, there were 1,979 signatures. Once the petition amasses 40,000 signatures, Mironova plans to bring them to the authorities, making them aware of the public dissent.

“Open-source software is flexible and secure, as it can be audited, fixed and improved by anyone,” the petition says. “But a developer has no control whatsoever over how their open-source code is subsequently used.”

On Saturday, more than 50 people gathered in Amsterdam's Dam Square to protest.