Markets Insights

Next FOMC meeting: July 26 2023.
Probability of a 0bps hike → 8%
Probability of a 25bps hike → 92%

The News Room

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Centralization Comes to DeFi as Group Behind MIM, SPELL Tokens Mull Legal Shakeup

The developers behind the MIM and SPELL tokens, popular decentralized finance (DeFi) projects, are considering a legal restructuring that could introduce a level of centralization. The move is aimed at addressing regulatory concerns and potential legal risks associated with decentralized protocols. While DeFi has traditionally been known for its decentralized nature, this potential shift highlights the growing need to navigate the regulatory landscape and ensure compliance. It also raises questions about the balance between decentralization and regulatory compliance within the DeFi space.

UAE emerges as a pro-Bitcoin mining destination in the Middle East

The United Arab Emirates (UAE) is becoming a favorable destination for Bitcoin mining in the Middle East. The country's pro-business policies, attractive regulatory environment, and access to low-cost energy sources have attracted miners from around the world. With its strategic location and favorable conditions, the UAE is positioning itself as a hub for crypto mining activities. This development showcases the increasing interest of nations in the region to tap into the economic potential of the cryptocurrency industry and leverage blockchain technology for their economic growth.

BlackRock CEO Larry Fink sees bitcoin as 'digitizing gold'

Larry Fink, the CEO of BlackRock, one of the world's largest asset management firms, views Bitcoin as a digitized version of gold. Fink believes that the increasing adoption of Bitcoin by institutional investors demonstrates its store-of-value properties, akin to gold. He acknowledges the growing demand for digital assets and sees them as an alternative investment to traditional assets. Fink's perspective on Bitcoin reflects the evolving perception of cryptocurrencies among institutional players and the recognition of their potential as a viable investment option.

Bill to exempt foreigners from crypto taxes passes preliminary reading in Israel

A bill proposing to exempt foreign investors from crypto-related taxes has passed the preliminary reading in Israel. The legislation aims to attract foreign investment and encourage innovation in the crypto sector by providing tax incentives. If the bill becomes law, it would exempt foreign residents and non-residents from capital gains and other taxes on cryptocurrency transactions. This move is part of Israel's broader efforts to position itself as a crypto-friendly jurisdiction and stimulate the growth of its digital asset ecosystem by attracting international investors and fostering innovation in the sector.

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TradFi

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The US labor market stayed robust in June, with job creation significantly exceeding expectations.

The payroll processing firm, ADP, announced a considerable increase of 497,000 private sector jobs in June.

This not only surpassed the 267,000 job growth seen in May, but also outperformed the estimated 220,000.

In fact, it's the largest monthly growth since July 2022.

Interestingly, this significant leap in payrolls took place despite the Federal Reserve's consistent efforts over a year to raise interest rates, largely to temper the buoyant job market where there are almost two job vacancies for every job seeker.

On Thursday morning, following the release of this solid job report, the yield on the 10-year Treasury breached the 4% mark.

The strong jobs data led investors to believe in the increasing likelihood of another interest rate hike by the Federal Reserve at their next meeting on July 26th, with the probability spiking to 92% this morning.

Stock futures dipped on Thursday, as the better-than-expected job report stirred concerns among investors about the state of the economy and the future trajectory of interest rates.

Looking at the 4h chart of the S&P500, the index recently broke below a rising trend line formed at the end of May. Prices are currently hesitating near the support level of 4425 and are looking for a rebound. If we break this level to the downside, it is possible to witness a rebound off the 20-day moving average near 4410.

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Upcoming:

Thursday:

ADP Non-Farm
Unemployment claims
ISM Services PMI
JOLTS Job Openings

Friday →

US Non-Farm Employment
Unemployment rate.

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Bitcoin

Bitcoin prices surged to a 13-month peak on Thursday, bolstered by investor enthusiasm for the possible introduction of a U.S. Bitcoin ETF. This price uptick was influenced by the comments made by BlackRock CEO Fink on Fox Business News recently, though the market response was slightly delayed due to a less liquid environment.

Investors and traders alike showed upbeat sentiment after Larry Fink, the CEO of BlackRock, expressed the company's intention to simplify and reduce the cost of investing in Bitcoin. In his Wednesday interview on Fox Business News, Fink likened Bitcoin to digital gold, despite admitting that he doesn't personally own any. "In terms of Bitcoin, as I've previously mentioned, we have faith in the digitization of products," Fink elaborated. He described Bitcoin as an international asset that offers an alternative investment opportunity for people.

These are the upcoming spot Bitcoin ETF deadlines

BTUCSDT broke below the symmetrical triangle pattern on increased volume and is looking to retest the previous lows of 29,530.

A break of that level would confirm the breakdown of a potential double top pattern and may drag prices lower towards 28,500 and potentially 27,500.

BTC > 27,500 → Bullish
BTC < 27,500 → Neutral
BTC < 24,850 → Bearish

Ethereum

ETHUSDT has followed the market lower past our first support level and is now trading lower by 2% near 1875.

Prices broke below a rising trend line, dragging prices lower towards our next target of 1825.

We are back in the price range of high volume.

ETHBTC is pulling back from resistance near 0.0643 and is trending lower towards 0.0606.

ETH > 1910 → Bullish
ETH < 1910 → Neutral
ETH < 1630 → Bearish

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Altcoin Watch - Binance Coin

Binance is preparing for another upgrade of its wallet infrastructure, warning users about the upcoming address migration.

On July 6, Binance officially announced that it would retire selected deposit addresses in batches as part of a network address migration scheduled for Q3 2023. Binance’s latest wallet upgrade will affect a total of 40 cryptocurrencies.

In addition to wallet addresses, Binance will also deactivate memos. Also known as a destination tag, a wallet memo is an additional address feature necessary to identify a transaction recipient beyond a wallet address. Most centralized exchanges like Binance use one wallet address for all traders, so the memo determines the individual account.

BNB/USDT - On the daily chart, the 254.8 resistance has provided two strong reactions since our last altcoin watch on Binance Coin. Sell side liquidity is building up beneath these lows, therefore BNB is likely to continue in a downtrend. Todays news of the exchange retiring deposit addresses during the upgrade is only likely to be a catalyst for further downside.

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