Crypto Daybook Americas: Banks Favor King Dollar as BTC Price Tug-of-War Rages

By Omkar Godbole (All times ET unless indicated otherwise)

Bitcoin's bull-bear tug-of-war continues to rage, with prices recovering to over $97,000 from Monday's dip to $94,200. That slide was prompted by concern Google's new quantum-computing chip, Willow, could compromise BTC's security — a worry quickly dismissed by analysts.

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That leaves directional traders with little to do other than wait for the dust to settle before picking a side, as prices remain locked in Thursday's indecisive trading range.

But there’s a silver lining! The turbulence has crowded out those undisciplined, overleveraged altcoin traders, as is evident from perpetual funding rates. Altcoin rates have receded closer to the center of Velo Data's heat map, which oscillates between -200% and 200%, indicating more balanced conditions than the bullish extremes of last week. Tokens like Stacks' STX even sport negative funding rates, a perfect entry point for bulls, according to pseudonymous analyst Byzantine General.

"If these rates continue to decline, it could signal the unwinding of excessive long leverage, potentially leading to a more balanced market," analysts at Bitfinex said, adding that $100,000 is no longer the key support/resistance level and a new equilibrium is probably forming in spot markets.

That said, as we look toward the end of 2024, there’s a developing story: Banks are getting bullish on the dollar, which doesn’t usually bode well for assets denominated in the U.S. currency, like BTC and risk assets.

"The combination of cyclical, fiscal, and U.S. political forces is making the USD stronger again," HSBC said recently. "We update our USD bullish view further; the USD bubble is re-inflating, which spells trouble ahead for many other currencies." Citibank sees the dollar index (DXY) rallying to 115, an 8% increase.

Keep an eye on the Far East too. A renewed rally in Chinese stocks following Beijing's promise of more stimulus could suck capital from other markets, including cryptocurrencies.

Amid all this, there's talk President-elect Trump may struggle to deliver his crypto promises. Peter Tschir, head of macro strategy at Academy Securities, put it best: "Trump does have loyalty to those who helped fund his campaign, but I don't see this as a lasting relationship, especially as he will likely get a lot of pressure from the National Security element of D.C. to be cautious on helping crypto too much."

After all, it's one thing to promise big from Mar-a-Lago and a different ball game when delivering from the White House. Stay Alert!

What to Watch

Crypto: Dec. 10, 11:30 a.m.: Microsoft's annual shareholders meeting. The meeting will include MicroStrategy Executive Chairman Michael Saylor's 44-slide presentation on investing in Bitcoin. Microsoft will then disclose the voting results. Livestream link. Dec. 13: The annual Nasdaq-100 reconstitution. Changes to the index, if any, are announced on this day. MicroStrategy (MSTR), the world’s largest corporate holder of bitcoin, is widely expected to be added to the index. Dec. 18: CleanSpark (CLSK) Q4 FY 2024 earnings. EPS Est. $-0.18 vs Prev. $-1.02.

Macro Dec. 11, 8:30 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases November’s Consumer Price Index (CPI) data. Inflation Rate YoY Est. 2.7% vs Prev. 2.6% Core Inflation Rate YoY Est. 3.3% vs Prev. 3.3% Dec. 11, 9:45 a.m.: The Bank of Canada announces its policy interest rate (also known as overnight target rate and overnight lending rate). Est. 3.25% vs Prev. 3.75%. A press conference starts at 10:30 a.m. Livestream link Dec. 12, 8:15 a.m.: The European Central Bank (ECB) announces its latest monetary policy decision (three key interest rates) followed by a press conference at 8:45 am. Deposit facility interest rate Est. 3.0% vs Prev. 3.25%. Main refinancing operations interest rate Est. 3.15% vs Prev. 3.4%. Marginal lending facility interest rate Prev. 3.65%.



Token Events

Governance votes & calls Horizen to hold community call discussing ZEN halving and future plans at 8 a.m.

Token Launches Movement's MOVE has added 63% since going live on Monday, reaching a $2.5 billion market capitalization. Binance listed SPX, VIRTUAL, RAY and KOMA on futures.

Hacks The Clober Liquidity Vault has been hacked, resulting in a loss of 133 $ETH (worth ~$500K). The exploiter has already bridged the stolen funds from Base to Ethereum.



Conferences:

Token Talk

By Shaurya Malwa



Everything with "quantum" in the name is pumping!

Various tokens themed after, or claiming to use, quantum computing within their technology stack jumped more than 100% in the past 24 hours after internet giant Google unveiled Willow, a quantum supercomputer that took 5 minutes to solve tasks during its testing period that would have taken 10 septillion years for current supercomputers to finish.

Crypto markets took a hit after the announcement on concerns the development was long-term bearish for bitcoin and other blockchains, whose security features can, in theory, be exploited by quantum computers.



But while the entire market dropped, tokens such as Quantum Resistant Ledger (QRL), Quantum Network, Quantum Swap, among others, zoomed higher.



Quantum-resistant or post-quantum tokens aim to use cryptographic algorithms believed to be secure against quantum computing attacks. These algorithms are designed to resist attacks using Shor’s algorithm, which is particularly effective against current public-key cryptosystems.

Tokens labeled with "quantum" might be perceived as being at the forefront of technology, even if their actual utility or relation to quantum computing is minimal. This perception can drive investment — and a chance to speculate on the short-term trading narrative.

Derivatives Positioning

Perpetual funding rates in DINO coins have normalized as Monday's price drop triggered a decent leverage washout.

ETH's implied volatility term structure remains in backwardation, pointing to higher near-term volatility.

A notable BTC options trade included a long position in the $150,000 strike call expiring in March. Meanwhile, someone sold the ETH $5,000 call expiring at the end of March in large numbers, collecting nearly $1.8 million in premium.

Short-term BTC and ETH calls are now trading at less than 2 vol premium to puts, a sign of weakening bull bias. (Source: Amberdata, Deribit, Velo Data)

Market Movements:

BTC is up 0.76 % from 4 p.m. ET Monday to $97,763.77 (24hrs: -0.3%)

ETH is up 1.66% at $3,765.44 (24hrs: -2.23%)

CoinDesk 20 is up 1.78% to 3,954.73 (24hrs: -4.54%)

Ether staking yield is up 15 bps to 3.2%

BTC funding rate is at 0.01% (10.95% annualized) on Binance

DXY is up 0.23% at 106.39

Gold is up 1.24% at $2,697.9/oz

Silver is up 0.9% to $32.51/oz

Nikkei 225 is up 0.53% unchanged at 39,367.58

Hang Seng is down 0.5% at 20,311.28

FTSE is down 0.63% at 8,299.38

Euro Stoxx 50 is down 0.45% at 4962.94

DJIA closed on Monday -0.54% to 44,401.93

S&P 500 closed -0.61% at 6,052.85

Nasdaq closed -0.62% at 19,736.69

S&P/TSX Composite Index closed -0.26% at 25,625.40

S&P 40 Latin America closed +1.15% at 2,356.64

U.S. 10-year Treasury was unchanged at 4.23%

E-mini S&P 500 futures are unchanged at 6,064.50

E-mini Nasdaq-100 futures are unchanged at 21,488.00

E-mini Dow Jones Industrial Average Index futures are unchanged at 44,455.00

Bitcoin Stats:

BTC Dominance: 56.82% (-0.22%)

Ethereum to bitcoin ratio: 0.03845 (0.76%)

Hashrate (seven-day moving average): 773 EH/s

Hashprice (spot): $61.93

Total Fees: 15.97 BTC / $9.46M

CME Futures Open Interest: 196K BTC

BTC priced in gold: 36.7 oz

BTC vs gold market cap: 10.46%

Bitcoin sitting in over-the-counter desk balances: 432K BTC

Basket Performance

Technical Analysis

SBIT's daily chart with RSI (TradingView/CoinDesk)

The chart shows the price of the Nasdaq-listed ProShares UltraShort Bitcoin ETF (SBIT) and its 14-day RSI, a momentum oscillator.

The RSI has diverged bullishly, contradicting the lower lows in prices in a sign of waning downward momentum. In other words, the ETF could see some gains in the short-term.

Crypto Equities

MicroStrategy (MSTR): closed on Monday at $365.34 (-7.51%), up 2.72% at $375.49 in pre-market.

Coinbase Global (COIN): closed at $310.52 (-9.63%), up 2.62% at $318.67 in pre-market.

Galaxy Digital Holdings (GLXY): closed at C$26.72 (-10.64%)

MARA Holdings (MARA): closed at $23.86 (-9.72%), up 1.82% at $24.29 in pre-market.

Riot Platforms (RIOT): closed at $11.21 (-13.44%), up 1.52% at $11.38 in pre-market.

Core Scientific (CORZ): closed at $16.04 (-5.59%), up 0.31% at $16.09

in pre-market.

in pre-market. CleanSpark (CLSK): closed at $13.56 (-9.42%), up 3.61% at 14.05.

CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $28.58 (-7.63%).

Semler Scientific (SMLR): closed at $62.12 (+0.6%).

ETF Flows

Spot BTC ETFs:

Daily net inflow: $479.1 million

Cumulative net inflows: $33.88 billion

Total BTC holdings ~ 1.108 million.

Spot ETH ETFs

Daily net inflow: $149.8 million

Cumulative net inflows: $1.56 billion

Total ETH holdings ~ 3.287 million.

Source: Farside Investors

Overnight Flows

Chart of the Day

NVDA's price chart (TradingView/CoinDesk)

The rally in Nvidia (NVDA), which has traditionally shown a positive correlation with bitcoin, appears to have lost momentum.

While You Were Sleeping

In the Ether