Daily Flash | BTC Hovering At 50 Day-EMA While Broader Markets Await Friday US Jobs Report, Wall Street Lost Momentum On Wednesday

Fundamental and Technical Outlook

👓 Macro

This week, investors have been focusing on Friday’s jobs report for September for clues as to whether the Fed might keep up its pace of outsize rate hikes in the face of robust wage gains that have been fueling inflation.

Futures traders on the Chicago Mercantile Exchange now expect the federal funds rate to peak at 4.5% next year; just a week ago the expectation was for the rate to go as high as 4.7%.

Friday’s Employment Situation report, scheduled for release at 8:30 a.m., will likely show a similar weakening in the job market. According to FactSet, economists expect an increase of 250,000 jobs in September, a slowdown from the 315,000 reported for the month prior.

The dollar index is up over 16% so far in 2022. In a Reuters poll, 47 of 55 analysts said the dollar's broad strength against a basket of currencies hasn't yet reached an inflection point. Nearly all major currencies - eight among the G10 - which were down in double digits for the year were not expected to recoup their year-to-date losses over the next 12 months according to the same poll.

U.S. stocks ended lower Wednesday in choppy trade, after rallying sharply to kick off October and following their worst September since 2002. The DJIA (-0.14%), S&P 500 (-0.2%), and Nasdaq (-0.25%) all traded lower after seeing 2 consecutive green-days.

Bitcoin (BTC) was trading at $20,319 (+0.81%) and Ether (ETH) was changing hands at $1,371 (+1.46%) as of this writing. Ripple (XRP) +4.25%, Uniswap (UNI) +5.38%, and Ethereum Name Service (ENS) +10.18%.

🟠 BTC Weekly Timeframe

As of Oct. 6, Bitcoin (BTC) has risen back above the monthly level of 19,858 and appears to be approaching the closest resistance zone (20,907 - 21,569) which had been generated from last week’s high-low by using the Fibonacci extension tool.

Notably, the current price of BTC ($20,406) hovers at around the 50% (20,331) Fibonacci retracement level from the previous bearish wave.

Looking ahead in the coming weeks, key resistance and support zones have been measured from various Fibonacci extension levels.

BTC Weekly Support zones

1. 17,974 - 17,167
2. 16,880 - 16,221

BTC Weekly Resistance zones

1. 20,907 - 21,569
2. 22,490 - 23,290

Daily Timeframe

As of this writing on Oct. 6 02:07 UTC, BTC was trading at $20,431 (+1.34%) in a 24hr period.

BTC Daily Resistance zones

1. 19,967 - 20,374
2. 20,868 - 21,385

BTC Daily Support Zones

1. 19,876 - 19,699
2. 19,561 - 19,342

🔵 ETH Weekly Timeframe

As of Oct. 6, Ether (ETH) is showing strength within the two weekly support trendlines. Notably, the current price of ETH ($1,374) is trading slightly above the 23.6% (1,361) Fibonacci level measured from the last 3 weeks’ slump.

ETH Weekly Support zones

1. 1,264 - 1,180
2. 1,180 - 1,108
3. 1,108 - 1,033

ETH Weekly Resistance zones

1. 1,361 - 1,433
2. 1,433 - 1,558

Daily Timeframe

As of this writing on Oct. 6 02:29 UTC, ETH was trading at $1,372 (+1.48%) in a 24hr period.

This past week has been quite bullish for ETH. If we see the closing price of today sustained above the 23.6% (1,361) Fibonacci level which is within the current resistance zone (1,356 - 1,378), then it is very likely the bulls will continue to push the price of ETH towards the next resistance zone (1,399 - 1,436).

ETH Daily Resistance zones

1. 1,356 - 1,378
2. 1,399 - 1,436

ETH Daily Support zones

1. 1,338 - 1,322
2. 1,303 - 1,286

📌 The topic of the Day: Criminals have laundered $4 billion in 2 years

On-chain analytics firm Elliptic has published a new report titled “The state of cross-chain crime report 2022” which said that cybercriminals have used DEXs, bridges, and coin swaps to launder nearly $4 billion since 2020.

For 2 years, DEXs have facilitated the movement of $1.2 billion in ill-gotten assets. The use of DEXs by criminals is closely associated with exploits in the DeFi space and hacks of centralized exchanges.

The next tool of choice is cross-chain bridges which have been used to funnel nearly $750 million of illicit funds, an activity referred to as “chain hopping” by Elliptic. Over $540 million have been processed by RenBridge, a cross-chain bridge between Bitcoin and Ethereum.

The third tool detailed in the report is “coin swaps” or non-KYC cryptocurrency swap services which allow users to swap assets both within and across blockchains without opening an account. These account for $1.2 billion in illicit transactions since 2020.

Speaking to The Block, a spokesperson for Elliptic said,

“To be clear, Elliptic is not saying DEXs or bridges are used exclusively by criminals, in fact, the opposite is true, they are mostly used by legitimate users. But Elliptic has traced illicit funds (from hacks etc) that have been moved through DEXs and bridges in order to obfuscate their origin.”

🗒 Happenings of The Week (Oct. 01 - 06)

• 🔹The European Council passes MiCA, EU’s comprehensive crypto regulation. MiCA includes a 12-18 month adaptation period to prepare for the new laws set in place. The legislation will need to pass through an additional vote in the European Parliament next week.

• 🔹EU policymakers voted in favor of a resolution to use blockchain technology to modernize taxation processes in the European Union. The resolution tries to identify what makes a taxable event and suggests that the conversion from crypto to fiat currency is the most viable option.

• 🔹Senior U.S. regulators propose new legislation and increased rules around digital assets. The report identifies three primary regulatory gaps in the U.S. for digital assets, and 10 total recommendations for policymakers and regulators to address them. The report also calls for bank regulators to be more proactive in existing authority to supervise and examine digital asset firms.

• 🔹Musk renews bid at $54.20 per share for Twitter as he looks to avoid trial. The social media company sued Musk in July for backing out of the agreement to buy Twitter for $44 billion. Apollo Global Management has backed out from the financing deal that Musk proposed.

• 🔹Hedge fund titan Ray Dalio steps down as co-CIO of Bridgewater Associates, officially giving up control of the firm and its $150 billion in assets. Known for pioneering strategies like risk parity and its funds Pure Alpha and All Weather, Bridgewater delivered strong returns throughout various cycles for 40 years.

• 🔹Fidelity reveals Ethereum index fund with $5,000,000 in sales in a new filing with the SEC. In 2020, Fidelity launched a Bitcoin index fund that surpassed $125 million in investments in May.

• 🔹Hugo Boss has teamed up with the NFT collection Imaginary Ones to launch a “360-degree metaverse experience.” Hugo said 500 spots will be allocated to customers who purchase a limited edition "phygital" t-shirt that contains a QR code, from which users will be directed to a Snapchat lens to create a special augmented-reality effect.

• 🔹Reality TV star Kim Kardashian was charged by SEC for unlawfully promoting EthereumMax (EMAX). EMAX spiked 126% after the announcement. The star has agreed to pay $1.26 million in penalties to the SEC.

• 🔹Sushi DAO votes Jared Grey as the new 'Head Chef'. Grey is a former IT consultant and CEO of DeFi yield platform Eons Finance.

• 🔹Flashbots now account for 39% of Ethereum blocks as censorship concerns rise. Flashbots is a widely used service because it offers blocks that provide more value to validators. Some in the Ethereum community are calling on Flashbots to shut down its main relayer.

• 🔹U.S. Treasury bills now account for 58.1% of Tether's reserves, up from 43.5% in June. The stablecoin issuer has said that it would continue to reduce its commercial paper holdings and improve the quality of its reserves.

• 🔹This week’s fundraising activities include but are not limited to:

  • Web3 gaming studio Horizon Blockchain Games’ $40 million Series A led by Brevan Howard Digital and Morgan Creek Digital with participation from ****Ubisoft Entertainment SA and Take-Two Interactive Software.
  • Crypto protocol Golden raises $40 million in a Series B led by a16z. The protocol is building a platform that centralizes data using technologies and mechanics from Web3.
  • Crypto checking account provider Juno raises $18 million and launches tokens for its tokenized loyalty program. Juno says its checking accounts are free and insured by the Federal Deposit Insurance Corporation (FDIC).