First Mover: Stimulus Seen (for Bitcoin) as Moderna won’t save spirits from the third wave


Bitcoin rose, climbing above $ 16,000 on Monday after falling below the mark over the weekend.

“If we were to trade above $ 16,490 again, then we expect to see the bulls take the market by the horns and drive prices to a $ 17,000 handle,” Matt Blom, head of sales and trading at the company told clients. cryptocurrency holding company Diginex, in an email. “If we stay limited to $ 16,490. Then look for another period of consolidation.”

In traditional markets, European and Asian equities rose and US futures indicated an open to the upside as a coronavirus vaccine from Moderna was shown to be 95% effective in a preliminary analysis. Gold strengthened 0.2% to $ 1,892 an ounce.

Market movements

Advances in vaccine development may not come soon enough to avoid a third wave of the coronavirus denting consumer spirits during the crucial holiday shopping season, coupled with confidence in an economic recovery.

This could mean more pain for retailers, already suffering from blockages earlier this year, while reinforcing the need for new multi-billion dollar spending packages to provide aid to businesses and families. The momentum could support demand for bitcoin, seen by a growing number of investors in both digital and traditional asset markets as a hedge against inflation.

“All indications are that a package will still be needed to support the US economy,” Simon Peters, analyst for the eToro-inclusive cryptocurrency trading platform. “With bitcoin increasingly cementing its status as an effective inflation hedge and huge amounts of cash set to be pumped into Main Street USA, this could be another catalyst to finally bring the world’s most popular cryptoasset over $ 17,500. . “

Although markets were buoyed by news of successful vaccine development last week, a wide distribution of vaccinations is not expected for several months. White House coronavirus consultant Anthony Fauci’s predictions that cases would increase as winter arrives in the Northern Hemisphere – when people spend more time indoors – appear to be successful.

According to the Covid Tracking Project, hospitalizations in the United States have risen to a record of around 70,000, with daily deaths now at around 1,100, the highest since May.

“With the numbers getting worse by the day, we expect all measures of consumer sentiment to deteriorate in at least the next couple of months,” Pantheon’s chief economist Ian Shepherdson wrote in a report.


A third wave of coronavirus has pushed deaths in the United States to levels not seen since May.
Source: Covid Tracking Project

A report from the University of Michigan last week showed that U.S. consumer sentiment dropped unexpectedly this month to a reading of 77, well below economists’ forecasts for an 82.

The decline was driven by falling economic expectations among members of President Donald Trump’s Republican Party, following projections that he would lose his re-election bid, according to Pantheon.

But the real brake on consumer confidence could come from the resurgence of coronavirus cases around the world. Japan faces increasing pressure to reset the state of emergency and South Korea warns it is at a “critical crossroads,” according to Reuters. The United States of Michigan and Wisconsin on Sunday imposed new restrictions on public gatherings, including stopping the indoor food service, the news service reported.

“Significant and, in our view, undervalued economic damage resulting from this latest wave is possible without a significant package of tax relief from Congress,” brokerage firm Raymond James wrote in a report.

Expected President-elect Joe Biden is expected to speak on Monday to outline a strategy for economic recovery. According to Bloomberg News, the plan is expected to rely heavily on a proposed campaign for $ 2 trillion in government spending, including provisions for clean energy, infrastructure infrastructure and stimulating employment.

“The US economy relies heavily on consumer spending and if the rise in Covid-19 cases dented confidence significantly during the holiday season, it could have ramifications for the pace of economic recovery,” Peters wrote. eToro.


The graph overlaying retail sales with consumer confidence shows how closely the measures follow.
Source: Pantheon

Bitcoin Watch


Bitcoin daily chart indicators show signs of temporary bull fatigue.
Source: TradingView

Bitcoin is on the offensive, after growing for six consecutive weeks. The cryptocurrency is currently trading above $ 16,200, having consistently found demand below $ 16,000 over the weekend.

The long-term bullish case has likely strengthened with global stocks of negative yielding bonds hitting a new record high of $ 17.5 trillion this month. The number has more than doubled in the past eight months.

The sharp rise is the result of deep interest rate cuts by the US Federal Reserve and other major central banks, as well as massive bond purchases that stimulate liquidity to contain the economic fallout from the coronavirus pandemic. Analysts expect the massive negative-yielding bond stock to spur demand for inflation-resistant assets such as bitcoin.

“The more central banks print money and push bond yields lower to cope with ongoing stress in the global economy, the more compelling the economy around bitcoin becomes,” LMAX strategist Joel Kruger told CoinDesk on Telegram. Digital.

In the short term, the cryptocurrency may face some selling pressure as the daily chart indicators are flashing signs of bull fatigue. The MACD histogram, an indicator used to measure strength and trend changes, has plotted lower highs, contradicting higher highs on the price. Such bearish divergences are often followed by price falls.

Immediate support is seen at $ 15,715 (weekend low) followed by the psychological level of $ 15,000. Meanwhile, resistance is seen directly at $ 20,000.

Read more: Record levels of negative yielding debt strengthen the case for Bitcoin

What’s new

Bitcoin Cash splits into two new blockchains, again (CoinDesk)

Citi analyst predicts bitcoin could exceed $ 300K by December 2021 (CoinDesk)

Belarusian bank will offer bitcoin purchases, with litecoin and ether on the way (CoinDesk)

Novogratz’s Galaxy Digital makes double acquisitions in an attempt to strengthen institutional appeal (CoinDesk)

Bank of England Deputy Governor says it was not his job to “protect banks’ business models” from the impact of digital currencies (Reuters)

Fidelity crypto arm responds to 6 common criticisms of bitcoin (CoinDesk)

Voting on the blockchain as a solution to the problems of democratic elections is not the solution, says MIT in its latest report examining electronic voting on the blockchain (CoinDesk)


The latest news on traditional economics and finance

SEC Chairman Jay Clayton, who led the regulatory pushback against the bitcoin ETF, plans to step down at the end of the year (SEC)

The rush to US bank consolidation has begun as Pittsburgh-based PNC agrees to buy the US unit of Spain’s BBVA for $ 11.6 billion (MarketWatch)

Nigerian inflation rate accelerates to 14.2% from 13.7% a month ago, due to rising food costs caused by border closures, dollar restrictions and banditry attacks (Bloomberg)

The Australian stock market stopped trading 20 minutes after opening on Monday due to market data issues; trading is expected to resume on Tuesday (Reuters)

Korean Air Lines said on Monday it will buy $ 1.6 billion in troubled and indebted Asiana Airlines shares, creating the 15th largest carrier in the world (Reuters)

Tweet of the day


Sign up to get First Mover delivered to your inbox every weekday.

[ad_2]Source link