Does Bitcoin’s BTC price success depend on the upcoming presidential election?
Good morning. Here’s what happens:
Prices: The post-debt rally in the crypto market has ended, with bitcoin and ether falling in East Asia. What is the next narrative for crypto?
Insight: The latest Commitment of Traders reports show an increase in open long positions among asset managers.
Looking for the next price story
Yesterday’s rally after the debt ceiling agreement has come to an end.
Bitcoin begins the East Asian trading day down 1[ads1].3% at $27,746 while ether is down 1.1% at $1,893.
In recent weeks, crypto has struggled with a narrative problem. The absence of a defining narrative – is it a risk asset, or a hedge against risk? – has ensured patternless price fluctuations and confused investors.
For example, some would say that bitcoin should have risen due to uncertainty about the debt ceiling, as a US default would have shaken the traditional financial system. But instead, bitcoin acted like a stock. Perhaps crypto’s narrative is no narrative at all.
Ed Moya, senior market analyst at forex market maker OANDA, argues that the upcoming US election is the narrative to watch.
“We were reminded that the key to Bitcoin’s success in the US may hinge on the upcoming presidential election,” Moya wrote in a note on Friday. “Florida Governor Ron Desantis Announces Intentions to Run for President and Appears Ready to ‘Protect’ Bitcoin.”
With Central Bank Digital Currency as a new wedge issue in Florida’s political landscape, the national stage is the next logical step. Crypto has come up in elections around the world, such as South Korea and Thailand, and President Joe Biden mentioned it when discussing debt settlement negotiations.
Maybe this will be the narrative to watch?
Funding rates remain positive in crypto markets
The Commitment of Traders report shows that asset managers have increased their open long positions in bitcoin after falling in the previous two weeks. The increase of 24 contracts follows a reduction of 162 contracts the week before.
The increase caps what appeared to be more of a general reduction in exposure than a comment on the price itself. Asset managers also reduced their short positions over the same time period by a total of 194 contracts.
The Commodity Futures Trading Commission (CFTC) releases COT data weekly, detailing the open interest and activity of asset managers, leveraged funds and dealer intermediaries in bitcoin futures.
Asset Managers now account for 48.9% of open long positions on the Chicago Mercantile Exchange, and are long 97.25% of assets as a group.
“The Hash” hosts weighed in on the biggest stories shaping the crypto industry today. The number of Ether (ETH) on exchanges hit a low not seen since July 2016, as stakes deplete available Ether. Individually, the potential sign of good-economic-news-equals-bad-news for digital asset prices narratives is beginning to shift. The attorney representing some FTX investors, Adam Moskowitz, also joined “The Hash” to discuss basketball legend Shaquille O’Neal being served in a class action lawsuit regarding FTX and its celebrity endorsements.
