Daily News | Fed Chair Powell's Statement Takes Center Stage as Markets Await, Genesis Reached Restructuring Deal with DCG, dYdX Extend Lock-Up Period

2023-02-07, 02:02

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## Crypto Daily Digest: Markets Rise Slightly Ahead of Fed Chair Powell's Statement, Oil and Gold Continued to Struggle

Good morning, traders. It is Tuesday and like always, let’s get after it relentlessly. 🚀

Asian stocks and US equity futures are seeing modest growth as investors await Fed Chair Powell's statement due 17:40 UTC. Treasury and Australian bonds are experiencing changes in light of Powell's expected commentary on future interest rate cuts. However, a strategist from JPMorgan Chase has advised against following last week's Fed-driven stock rally, as they believe the current disinflationary trend in the US economy could be temporary.

Onto FX and commodities, the Japanese yen remains stable after gains in the [US Dollar](https://www.gate.io/trade/USD_USDT) as Japan saw an unexpected jump in nominal wages in December, the largest increase in nearly 26 years, leading the market to believe that the central bank may adjust or withdraw from its stimulus program under the new governor. Meanwhile, the oil market has risen slightly after falling near 9% since Jan. 23 while gold remains essentially unchanged since yesterday but is still down by 5% from its weekend height of $1,960.

Onto Crypto, both the cryptocurrency and stock markets had a poor start to the week with prices declining. [Bitcoin](https://www.gate.io/trade/BTC_USDT) was trading at $22,810 with a decrease of 1.1%. The reason for the drop in crypto prices was the strong U.S. job report which goes in parallel with the Fed’s intent to reduce inflation.

Other cryptocurrencies such as Ether, BNB, XRP, and SOL also saw a decrease. As the Nasdaq and S&P 500 dropped, so did Coinbase shares which decreased by 4.6% and Silvergate by 8%. Grayscale's [Bitcoin](https://www.gate.io/trade/BTC_USDT) trust GBTC had a larger discount and closed the week with a 42% discount compared to the value of the [Bitcoin](https://www.gate.io/trade/BTC_USDT) it holds.

Taking center stage in crypto, Genesis Global has made headlines by reaching an agreement, in principle, with Digital Currency Group (DCG) and its creditors to restructure its operations.

The restructuring plan involves the sale of Genesis' crypto trading and market-making arm. As part of the agreement, DCG will transfer its equity in Genesis Global Trading to Genesis Global Holdco, the holding entity for Genesis, and also refinance its existing loans. Both Genesis and DCG creditors can expect to recover 80% of their funds, with the potential to reach 100%. The actual recovery rate is contingent on the convertible preferred equity note, the results of liquidating assets, and the costs associated with the ongoing bankruptcy proceedings.

Genesis is undergoing Chapter 11 bankruptcy due to a liquidity crisis caused by the bankruptcy of crypto exchange FTX.

## Topic of the Day: dYdX Tokenomics - A Game of Wait and See

It seems that dYdX Foundation, the team behind the popular decentralized crypto exchange, has had a change of heart - or rather, a change of tokenomics. They recently announced some "adjustments" to their token distribution strategy. Now, instead of releasing early investor tokens on Feb. 1st, they'll be locked up until Dec. 1, 2023. This move has caused quite a stir in the crypto world, as some saw it as a vote of confidence in the long-term success of the project, while others were disappointed by the delayed token supply.

But what could have prompted this sudden change of plans? Some say that the recent crackdown by the SEC on enforcement actions might have scared dYdX into having a heart-to-heart with their lawyers. And as we all know, lawyers can be real party-poopers. But, in all seriousness, the question remains: why would early investors agree to a longer lockup period? The answer is simple: they want to comply with U.S. securities law.

In the land of the free, all securities must either be registered, exempt, or illegal. And, if you're feeling particularly patriotic, you must also follow certain rules to avoid being deemed an "underwriter." One of these rules is Securities Act Rule 144, which requires a one-year holding period for all sales, affiliate or non-affiliate, to prove that the securities were purchased with "investment intent."

So, perhaps the dYdX investors who agreed to the change of tokenomics wanted to signal their confidence in the project by delaying their access to the tokens. Or, maybe they wanted to show their commitment to U.S. laws and inch their way toward compliance. Either way, it will be fascinating to see what other measures dYdX takes with respect to token emissions in the future.

## dYdX (DYDX) $2.9513 (+1.73%) - Neutral Outlook

**Overview:**

- ***Closest daily support zone: 2.088 - 2.616***
- ***Closest daily resistance zone: 2.944 - 3.088***
- ***Key Level: 3.088 (Monthly Low of Apr. 2022)***

![](https://gimg2.gateimg.com/image/article/1675735281Untitled0207.png)

Current price action is moving accordingly to last week’s (Feb. 02) analysis and the current pullback seems to have some more room to fall. Since making two successful breakouts on Jan. 25 and 31, respectively, dYdX has fallen 21% from its height of 3.673. The wick of the candlestick from the day before indicates buyers are reacting strongly to the 50% Fibonacci Retracement level. However, there’s a decent likelihood that dYdX will retrace further to the 61.8% (2.616) level before price action begins to stabilize and go into a consolidation phase.

**Daily Resistance zones**

1. 2.944 - 3.088
2. 3.108 - 3.426
3. 3.465 - 3.684

**Daily Support zones**

1. 2.088 - 2.616
2. 2.545 - 2.449
3. 2.143 - 2.031

<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>