Market Wrap: Crypto Markets Take Quieter Ride Following Thursday’s Roller Coaster

Price Action

A week highlighted by the release of a disappointing inflation report and other discouraging economic indicators ultimately did little to stir bitcoin from its narrow price range of the past few weeks.

Daily trading volume for the largest crypto by market capitalization has trailed its 20-day moving average for nine of the last 10 trading days. The exception occurred on Thursday, largely driven by market reaction to the Consumer Price Index (CPI) report.

• Bitcoin (BTC) was recently trading at about $19,300, roughly flat over the previous 24 hours and about where it stood at the beginning of the week. With a few brief exceptions, BTC has traded largely between $19,000 and $21,000 for the past month and remains close to 60% down from its price at the start of the year.
• Ether (ETH) was recently changing hands a little above $1,300, up more than 2% from Thursday, about where it started the week. ETH is down 23% since the Sept. 15 conversion of the Ethereum network from a proof-of-work consensus to the more energy efficient proof-of-stake consensus mechanism, and off 64% since the start of 2022.
• The CoinDesk Market Index (CMI), a broad-based market index that measures the performance of a basket of cryptocurrencies, is down -0.23%.
• The top altcoin gainers recently were Alchemy Pay’s ACH token and SushiSwap’s SUSHI, which rose 39% and 15%, respectively, while NuCypher’s NU had the toughest day, declining 24.4%

Macro View

Financial market participants were scrutinizing Thursday’s inflation report, which showed September prices rose 8.2% year over year versus expectations of 8.1%. Markets reacted negatively initially before regaining lost ground to end the day slightly higher.

U.S retail spending was unchanged for September versus expectations for a 0.2% increase. The unexpectedly low figure reflected lower demand, a result of rising costs.

In traditional financial markets, U.S. equities' seven-day performance was mixed, as the S&P 500 and Nasdaq Composite declined 1% and 2.7%, respectively. The Dow Jones Industrial Average (DJIA) finished the week up 1.5%.

Latest Prices

● CoinDesk Market Index (CMI): 939.27 −0.4%

● Bitcoin (BTC): $19,161 −1.1%

● Ether (ETH): $1,298 +0.9%

● S&P 500 daily close: 3,584.01 −2.3%

● Gold: $1,649 per troy ounce −1.3%

● Ten-year Treasury yield daily close: 4.01% +0.06

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Technical Take

BTC and ETH Trade Quietly After Thursday’s Roller-Coaster Ride

Price action for the two largest cryptocurrencies by market capitalization was quiet on Friday, as both ended the traditional U.S. trading day relatively flat.

Following an expansion of trading activity on Thursday, bitcoin volume retreated below its 20-day moving average on Friday, continuing a theme of recent weeks. A similar pattern has occurred with ETH, though Friday volume on ETH was close to its average.

BTC’s Bollinger Bands shows that bitcoin is trading just below its 20-day moving average for price, while volatility has remained relatively stable.

Bollinger Bands are a technical indicator that plots an asset’s average prices, and calculates two standard deviations above and below the average.

Statistically, an asset’s price stays within two standard deviations of its average 95% of the time. A widening of Bollinger Bands indicates an increase in volatility, while a narrowing of bands indicates the opposite.

Since Oct. 3, the upper and lower bands for BTC have narrowed, highlighting bitcoin’s recent propensity to trade flat.

BTC touched the upper range of its Bollinger Bands Oct. 3-5 before retreating below the mean briefly. The opposite occurred on Oct. 13, as prices initially reacted poorly to CPI data before reverting.

Today, BTC made a brief attempt to surpass $20,000 during the 12:00 UTC (8:00 a.m. ET) hour, but was met with resistance and declined to current levels throughout the remainder of the day.

Altcoin Roundup

• Mango Markets Community Counters Expoiter’s Settlement Offer: The initial offer appeared to have been rejected. Earlier this week, Solana-based decentralized finance platform Mango was exploited for over $100 million, sending its MNGO token plunging. Read more here.

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CoinDesk Market Index

Biggest Gainers

Asset Ticker Returns DACS Sector Alchemy Pay ACH +28.18% Currency Ribbon Finance RBN +9.57% DeFi SushiSwap SUSHI +8.9% DeFi

Biggest Losers

Asset Ticker Returns DACS Sector Synthetix SNX -5.98% DeFi Hedera HBAR -5.65% Smart Contract Platform Project Galaxy GAL -4.52% Digitization

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.