Značka: Inflation

Bitcoin sees worst monthly close in 2 years as traders watch $16.7K

Bitcoin (BTC) attempted to flip $17,000 to support on Dec. 1 after sealing its lowest monthly close in two years.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBitcoin gains inch up as November endData from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $17,100 in a second intraday charge at higher levels. The pair managed to avoid losses as the monthly candle closed, instead seeing solid daily gains of around 4.5% for Nov. 30.Nonetheless, Bitcoin shed 16.2% for the month, making November 2022 its worst since 2019.BTC/USD monthly returns chart (screenshot). Source: CoinglassThe more buoyant mood coincided with comments from the United States Federal Reserve. In a speech on inflation and the labor market, Chair Jerome Powell openly stated that smaller interest rate hikes could begin as soon as December.“Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt,” he said. “Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.” Powell characteristically cautioned on heralding a full turning point in policy, something markets had been keenly awaiting throughout the year.“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he added.Nonetheless, stocks reacted positively, the S&P 500 and Nasdaq Composite Index ending the day up 3.1% and 4.4%, respectively, in line with Bitcoin.No euphoria among tradersIn responses of their own, meanwhile, crypto market commentators were equally cool on the immediate prospects despite the moderate month-end gains.Related: Bitcoin capitulation 4th-worst ever as BTC hodlers lose $10B in a weekCrypto Tony warned that bulls were “getting cocky” into December, and that now was not a suitable blind entry point.“Now is not the time to go all in, thinking this is the bottom on Crypto,” he told Twitter followers.“We have yet to see : – A macro higher high and higher low (Market structure trend change) – Bull volume coming in – Spot buys on the increase – Completed corrective structure.”BTC/USD annotated chart. Source: Crypto Tony/ TwitterA key level to hold for continuation of the “bullish market structure,” he added, was $16,700.Michaël van de Poppe, founder and CEO of trading firm Eight, agreed on the importance of an area focused on $16,700 for his own strategy.The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Blockchain-based fintech company prepares to enter $500B freight settlement market

The world is quick to blame inflation for the rising prices at grocery stores and retailers. This was the #1 political issue for recent Election Day voters in the United States. For example, media sources recently reported poll data that 85% of Americans could not afford to spend $200 on a Thanksgiving meal in November 2022, and only 25% could afford $100.However, few recognize inflation is only part of the problem. Higher costs for products and services are also directly attributable to settlement fees paid by transportation providers who are forced to take out the equivalent of payday loans against their freight invoices.Shipper payment terms in the transportation industry are known to be egregious, and most transportation carriers cannot afford to wait 30–180 days to get paid. When a carrier factors, it pledges the collection rights in its accounts receivable to the bank and, in exchange, the bank advances cash in about 10 business days.By industry averages, this cost to carriers is 3% of every receivable — often escalating up to a 25% annualized interest rate. The bank then waits the 30–180 days and collects directly from the freight shipper. If inflation is thought of as a silent tax, invoice factoring is a second layer of silent taxes on everything we buy.More than 1 million U.S. trucking companies are factoring 100% of their invoices, and 50% of third-party logistics companies are too. Due to inflation, larger transportation companies are also losing 3% or more of their invoice values when waiting over 60 days to get paid by shippers. These costs create higher freight rates, and the excesses ultimately trickle down to every household and consumer.Fixing a broken supply chain by settling on the blockchainTruckCoinSwap (TCS) is a fintech and freight-tech company utilizing a blockchain-integrated mobile app to provide fast and free freight receivables settlement to transportation companies. Moreover, TCS is listed on CrossTower in the U.S. and abroad in 80 countries, and is now also listed on Uniswap.Chief technology officer Jake Centner explained:“Centralized exchanges can work very well, and the team couldn’t be more proud of the relationships TCS has made. However, the TCS token must also have a decentralized exchange and non-custodial option in the ecosystem for transportation companies and holders. Uniswap has been the gold standard in this space.”To that end, TCS has created a process and platform identical to how carriers are settling now, with one added step. A few days after uploading freight documents into the TCS mobile app, a push notification is sent and settlement is made available in the real-time U.S. dollar (USD) value of TCS tokens.The carrier can then accept settlement via direct deposit from TCS. After receiving the balance in its crypto wallet, the carrier can immediately sell through its exchange market to regain USD liquidity. By taking settlement via TCS, and being able to sell in a matter of minutes, carriers avoid both factoring costs and crypto volatility.By industry averages, TCS estimates every factoring freightliner can recapture a significant portion of its net revenue. In the supply chain, reducing operating costs makes transportation companies more solvent and applies downward pressure on freight rates. In time, the costs of goods and, more specifically, food prices, can decrease.Regarding the company’s adoption, CEO Todd Ziegler shared:“TCS already has truckers involved in the beta, and we were just approached by two more large strategics. One has 223 trucks. The second is one of the largest companies in the U.S. managing freight documents, with over 500,000 transportation users. It speaks volumes that these companies are already interested in integrating with TCS.”The future of freight and blockchainEarlier this month, TCS presented its solution at the Future of Freight conference to over 20,000 attendees and has since gained traction in both the crypto and transportation communities with features in FreightWaves, business publications and other related media.With many strategic relationships already in play, TCS believes it is in a strong position to help carry the transportation industry forward into web3. In looking ahead to the intersection of the two industries, Ziegler offered:“Following recent court rulings and the acceleration of the DCCPA [Digital Commodities Consumer Protection Act] on Capitol Hill, we’re going to see U.S. crypto exchanges eliminate several coins. Many exchanges are already struggling for revenue and AUM [assets under management], and they’re not going to stick their necks out in the wake of FTX. The projects with no real use case will be the first to go, and the digital assets with value propositions to industry will see greater market share.”Material is provided in partnership with TCSDisclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

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Bitcoin price hits $17K on US PPI as trader warns of ‘final capitulation’

Bitcoin (BTC) spiked to $17,000 at the Nov. 15 Wall Street open as fresh United States economic data continued to show inflation cooling.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView“Good” PPI boosts risk assetsData from Cointelegraph Markets Pro and TradingView followed BTC/USD as it came closer to multi-day highs.Volatility had returned an hour before the open as the U.S. Producer Price Index (PPI) came in below expectations.Core PPI was unchanged month-on-month, with the PPI overall up 0.2% versus the 0.4% forecast. Year-on-year PPI was 8% versus the 8.3% forecast.The data, already in stark contrast to last month’s PPI, follows on from October’s Consumer Price Index (CPI) readout last week, this also showing that price increases in the U.S. were slowing.An ostensibly good sign for crypto along with risk assets, lower numbers theoretically increase the likelihood of an earlier pivot in hawkish economic policy from the Federal Reserve.“Good CPI & Good PPI,” Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.Others were more suspicious of the results in light of such aggressive quantitative tightening (QT) measures.“The PPI is the inflation number Fed uses to make decisions,” popular analyst Venturefounder wrote in part of a Twitter analysis. “Market rallies on the news, inflation may have peaked but I think the most alarming part is after record QT for almost a year the PPI is still at 8%.”U.S. Producer Price Index (PPI) chart. Source: Bureau of Labor StatisticsStocks naturally appreciated the latest economic changes, with the S&P 500 and Nasdaq Composite Index up 1.7% and 2.4%, respectively, at the open.The already precarious U.S. dollar index (DXY), meanwhile, felt the pressure, briefly dropping below 105.5 to its lowest levels since mid-August.U.S. dollar index (DXY) 1-day candle chart. Source: TradingViewBullish divergences meet the “final capitulation” riskFor Bitcoin, optimism was still hard to find in analytical circles.Related: Edward Snowden says he feels ‘itch to scale back in’ to $16.5K BitcoinNonetheless, for trader and analyst Seth, a fresh bullish divergence on the weekly chart was something to feel confident about.“Bears took credit for the FTX Blackswan. Not many knew 2nd largest Exchange was going Bankrupt!” accompanying Twitter comments stated.Bleaker news came from fellow analyst Matthew Hyland, whose previous warning of a bearish chart cross came true.“The previous two crosses resulted in -46% and -57% moves AFTER the cross was confirmed,” he reiterated about the three-day chart’s moving average convergence/divergence (MACD) indicator.BTC/USD annotated chart. Source: Matthew Hyland/TwitterIl Capo of Crypto, still eyeing a deeper macro low, meanwhile, added that the “final capitulation is likely.”The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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5 reasons 2023 will be a tough year for global markets

Those who come bearing warnings are rarely popular. Cassandra didn’t do herself any favors when she told her fellow Trojans to beware of the Greeks and their wooden horse. But, with financial markets facing unprecedented turbulence, it’s important to take a hard look at economic realities.Analysts agree markets face serious headwinds. The International Monetary Fund has forecast that one-third of the world’s economy will be in recession in 2023. Energy is in high demand and short supply, prices are high and rising and emerging economies are coming out of the pandemic in shaky conditions. There are five fundamental — and interlinked — issues that spell trouble for asset markets in 2023, with the understanding that in uncertain environments, there are no clear choices for investors. Every decision requires trade-offs. Net energy shortagesWithout dramatic changes in the geopolitical and economic landscape, fossil fuel shortages look likely to persist through next winter. Russian supplies have been slashed by sanctions related to the war in Ukraine, while Europe’s energy architecture suffered irreparable damage when a blast destroyed part of the Nord Stream 1 pipeline. It’s irreparable because new infrastructure takes time and money to build and ESG mandates make it tough for energy companies to justify large-scale fossil fuel projects.Related: Bitcoin will surge in 2023 — but be careful what you wish forMeanwhile, already strong demand will only increase once China emerges from its COVID-19 slowdown. Record growth in renewables and electric vehicles has helped. But there are limits. Renewables require hard-to-source elements such as lithium, cobalt, chromium and aluminum. Nuclear would ease the pressure, but new plants take years to bring online and garnering public support can be hard.Reshoring of manufacturingSupply chain shocks from the pandemic and Russia’s invasion of Ukraine have triggered an appetite in major economies to reshore production. While this could prove a long-term boon to domestic growth, reshoring takes investment, time and the availability of skilled labor.In the short to medium-term, the reshoring of jobs from low-cost offshore locations will feed inflation in high-income countries as it pushes up wages for skilled workers and cuts corporate profit margins.Transition to commodities-driven economiesThe same disruptions that triggered the reshoring trend have led countries to seek safer — and greener — raw materials supply chains either within their borders or those of allies. In recent years, the mining of crucial rare earth has been outsourced to countries with abundant cheap labor and lax tax regulations. As these processes move to high-tax and high-wage jurisdictions, the sourcing of raw materials will need to be reenvisioned. In some countries, this will lead to a rise in exploration investment. In those unable to source commodities at home, it may result in shifting trade alliances. We can expect such alliances to mirror the geopolitical shift from a unipolar world order to a multipolar one (more on that below). Many countries in the Asia Pacific region, for instance, will become more likely to prioritize China’s agenda over that of the United States, with implications for U.S. access to commodities now sourced from Asia.Persistent inflationGiven these pressures, inflation is unlikely to slow anytime soon. This poses a huge challenge for central banks and their favored tool for controlling prices: interest rates. Higher borrowing costs will have limited power now we have entered an era of secular inflation, with supply/demand imbalances resulting from the unraveling of globalization. 12-month percentage change in the Consumer Price Index (CPI), 2002-2022. Source: Bureau of Labor StatisticsPast inflationary cycles have ended when prices rose to a point of unaffordability, triggering a collapse in demand (demand destruction). This process is straightforward when it comes to discretionary purchases but problematic when necessities such as energy and food are involved. Since consumers and businesses have no alternative but to pay the higher costs, there is limited scope to ease upward pressure, particularly with many governments subsidizing consumer purchases of these staples.Accelerating decentralization of key institutions and systemsThis fundamental shift is being driven by two factors. First, a realignment in the geopolitical world order was touched off by broken supply chains, tight monetary policy, and conflict. Second, a global erosion of trust in institutions caused by a chaotic response to COVID-19, economic woes and rampant misinformation. The first point is key: Countries that once looked to the United States as an opinion leader and enforcer of the order are questioning this alignment and filling the gap with regional relationships. Meanwhile, mistrust in institutions is surging. A Pew Research Center survey found that Americans are increasingly suspicious of banks, Congress, big business and healthcare systems — even against one another. Escalating protests in the Netherlands, France, Germany and Canada, among others, make clear this is a global phenomenon.Related: Get ready for a swarm of incompetent IRS agents in 2023Such disaffection has also prompted the rise in far-right populist candidates, most recently in Italy with the election of Georgia Meloni. It has likewise provoked growing interest in alternative ways to access services. Homeschooling spiked during the pandemic. Then there’s Web3, forged to provide an alternative to traditional systems. Take the work in the Bitcoin (BTC) community on the Beef Initiative, which seeks to connect consumers to local ranchers. Historically, periods of extreme centralization are followed by waves of decentralization. Think of the disintegration of the Roman Empire into local fiefdoms, the back-to-back revolutions in the 18th and early 19th century and the rise of antitrust laws across the West in the 20th. All saw the fragmentation of monolithic structures into component parts. Then the slow process of centralization began anew.Today’s transition is being accelerated by revolutionary technologies. And while the process isn’t new, it is disruptive — for markets as well as society. Markets, after all, thrive on the ability to calculate outcomes. When the very foundation of consumer behavior is undergoing a phase shift, this is increasingly hard to do.Taken together, all these trends point to a period where only the careful and opportunistic investor will come out ahead. So fasten your seatbelts and get ready for the ride. Joseph Bradley is the head of business development at Heirloom, a software-as-a-service startup. He started in the cryptocurrency industry in 2014 as an independent researcher before going to work at Gem (which was later acquired by Blockdaemon) and subsequently moving to the hedge fund industry. He received his master’s degree from the University of Southern California with a focus in portfolio construction/alternative asset management.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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FTX crisis likely to spark a domino effect, macro analyst explains

The repercussions of the cataclysmic FTX downfall are going to be broader than the crypto markets, as they will accelerate downward moves in stocks and commodity markets, according to Mike McGlone, senior marco analyst at Bloomberg.“Bitcoin has been one of the leading indicators on the way up, and it’s a leading indicator on the way down. And it’s just broken down, so expect most dominoes to fall,” McGlone pointed out in a recent interview with Cointelegraph. McGlone expects traditional stocks to continue falling as the Federal Reserve keeps raising interest rates in an attempt to curb inflation. According to the analyst, the FTX crisis will also accelerate the decline in commodity prices as the world economy enters a period of recession.The FTX shock will likely send Bitcoin prices to new lows, according to McGlone. “I’m afraid Bitcoin might head to the $10,000 to $12,000 area,” he believes. To understand the implications of the FTX crisis from a global macro perspective, watch the full interview on our YouTube channel, and don’t forget to subscribe!

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Ethereum turns deflationary for the first time since the Merge — ETH price still risks 50% drop

The annual supply rate of Ether (ETH) slipped below zero for the first time since Ethereum’s transition to proof-of-stake via the Merge in September. The reason? A spike in on-chain activity amid a massive cryptocurrency market crash. Ether turns deflationary for realAs of Nov. 9, more Ether tokens are being burned than created as a part of Ethereum’s fee-burning mechanism. Simply put, the more on-chain transactions, the more ETH transaction fees get burned. On a 30-day timeframe, the Ethereum network has been burning ETH at an annual rate of 773,000 tokens against the issuance of 603,000 tokens. In other words, ETH’s supply is going down by 0.14% per year.Ether supply growth as of Nov. 11. Source: Ultrasound.MoneyOverall, the Ethereum network has burned 2.72 million ETH since the fee-burning mechanism was introduced in August 2021. That amounts to the permanent destruction of nearly 4 ETH per minute.Ethereum’s transaction fees spiked to their highest levels since May 2022 due to traders rushing to transfer their ETH to and from exchanges amid the dramatic collapse of FTX. Ethereum transaction fees performance in the last six months. Source: YChartsIn detail, nearly 1 million ETH has left exchanges in November, according to data from Glassnode.Ether balance on all exchanges. Source: Glassnode Many analysts see Ether’s deflationary prospects as a bullish signal, which should boost its overall scarcity. But the ongoing deflationary rate is a product of current ETH price volatility, which may hurt its recovery prospects in the near term.Ether’s price in danger of another 50% crashEther’s price dropped nearly 20% month-to-date and was trading around $1,250 on Nov. 11 after it had rebounded from its $1,075 local low.Furthermore, Ether’s price action has also entered the breakdown stage of its prevailing symmetrical triangle pattern, which may push the price down further by another 50% from current levels.Related: Bitcoin price hits multi-year low at $15.6K, analysts expect further downsideSymmetrical triangles are continuation patterns, meaning they typically resolve after the price breaks out of their range while pursuing the direction of its previous trend. As a rule of technical analysis, the pattern’s profit target is measured after adding the triangle’s height to the breakout point.ETH/USD 3-day price chart featuring symmetrical triangle’s breakdown setup. Source: TradingViewApplying the theory to Ether’s symmetrical triangle places its downside target at around $675 by December 2022, down about 50% from current prices.$ETHIt got rejected from 1600-1650. Now it’s looking bullish on ltf, so expecting a last leg up to 1700, matching with BTC going to 21000-21500. 1700 is a key resistance. It should get rejected hard.Main target for a local bottom = $700-800 pic.twitter.com/UkAphVl2MV— il Capo Of Crypto (@CryptoCapo_) November 2, 2022More bearish arguments stem from a recent decline in the supply held by Ethereum’s richest investors. Notably, the duration of Ether’s November downtrend has coincided with the drop in Ether supply held by addresses with a balance between 1 million ETH and 10 million ETH.Ether supply percentage held by addresses with 10K–10M ETH balance. Source: SantimentConversely, addresses with a balance between 1,000 ETH and 10,000 ETH have risen during the price decline. This could mean two things. First, addresses with over 10,000 ETH tokens reduced their holdings and thus landed in the smaller cohorts.These cohorts may include exchange wallets that have witnessed massive ETH outflow amid the FTX fiasco.Ether supply percentage held by addresses with 10–10K ETH balance. Source: SantimentSecond, the 10–10,000 ETH cohort saw Ether’s price decline as a “buy the dip” opportunity, which boosted its control over Ether’s supply in November.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin price gains $1K in minutes as CPI data deals DXY fresh 2% dip

Bitcoin (BTC) surged $1,000 in five minutes before the Nov. 10 Wall Street open as United States inflation and jobs data boosted risk assets.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewCPI comes in lowest since the start of 2022Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing to daily highs of $17,782 on Bitstamp.The pair was just hours from a more-than-two-year low below $15,700 at the time, taking its 24-hour low-to-high to 12.8%.At the time of writing, BTC/USD circled $17,400 with volatility still rampant as U.S. markets opened to digest economic data.This had come in the form of the Consumer Price Index (CPI) print for October, along with jobless claims.Both offered a positive surprise, CPI coming in below expectations and jobless claims above, both implying that the Federal Reserve’s rate hikes were working and that a pivot may come sooner than feared.Analyzing Bitcoin’s reaction to the Binance order book, monitoring resource Material Indicators showed the nearest resistance hurdle at $18,500.“Bear Market Rally is still alive,” part of accompanying comments read.BTC/USD order book data chart (Binance). Source: Material Indicators/TwitterTrading account IncomeSharks was even more optimistic, arguing that $20,000 may return as part of the risk asset rebound.“Bitcoin- Has an easy path back to $20k as Stocks pushing up and positive CPI numbers,” it told Twitter followers.At 7.7% year-on-year, the October CPI readout marked the lowest since January, an accompanying press release confirmed.“The all items less food and energy index rose 6.3 percent over the last 12 months. The energy index increased 17.6 percent for the 12 months ending October, and the food index increased 10.9 percent over the last year; all of these increases were smaller than for the period ending September,” it stated.U.S. Consumer Price Index (CPI) chart. Source: Bureau of Labor StatisticsDXY tanks 2% on economic numbersMeanwhile, an already weakened U.S. dollar index (DXY) felt instant pain at the release, dropping over 2% for the second time in recent days.Related: Analysts urge calm as Tether depegs from USD, Bitcoin loses $17K reboundDXY circled 108.6 at the time of writing, its lowest since Sept. 13.U.S. dollar index (DXY) 1-hour candle chart. Source: TradingViewAt the same time, stocks opened markedly higher, with the S&P 500 up 3.5% and Nasdaq Composite Index gaining 4.6%.Popular analyst John Wick, like others, nonetheless advised caution.“Dollar falling out of the up-channel due to CPI numbers. This giving relief to assets,” he tweeted alongside a DXY chart. “Just because an up-channel is broken does not mean a sustained downtrend always happens. Often another channel may form at a slower rate of assent, or may jump back to original channel.”U.S. dollar index (DXY) annotated chart. Source: John Wick/TwitterThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Crypto no more in top 10 most-cited potential risks: US central bank report

While proponents of traditional finance remain keen on dismissing Bitcoin (BTC) and the crypto ecosystem as financial risks, a survey conducted by the Federal Reserve Bank of New York — one of the 12 federal reserve banks of the United States — revealed 11 factors that overshadow crypto in terms of risk in 2022.Geopolitical tensions, foreign divestments, COVID-19 and high energy prices were found to be some of the most-cited potential risks for the US economy, according to a central bank survey published by the Federal Reserve System.Federal Reserve Bank of New York survey results. Source: Federal Reserve SystemOut of the 14 factors that pose a financial risk, crypto stands at the 11th position — revealing a change in investor mindset owing to the continued efforts of crypto entrepreneurs to educate the masses. Some of the pressing risk concerns raised by the respondents were related to the power struggle of global economies, which includes the U.S.-China tensions, the Russia-Ukraine war, higher energy prices, rising inflation, the COVID-19 pandemic and cyberattacks, to name a few.However, the U.S central maintains its anti-cryptoposition when it comes to evaluating the risks in crypto investment. It pointed out in the report that selected cryptocurrencies — including BTC, Ether (ETH), Binance Coin (BNB), Cardano (ADA) and XRP — are down about 69 percent in value compared to the Nov. 2021 peak, adding that:“Speculation and risk appetite appear to be the primary driving forces of crypto-asset prices, which have recorded big swings in recent years.”The central bank also cited the collapse of the Terra (LUNA) ecosystem, highlighting that entities that had direct exposure to the in-house stable TerraUSD (UST) found themselves in financial distress, sometimes leading to bankruptcy.”Related: Joe Biden unhappy with Elon Musk for buying a platform that “spews lies”On the other side of the world, India launched its home-grown central bank digital currency (CBDC) for the wholesale segment. While the country is still opposed to the idea of mainstreaming cryptocurrencies, the pilot project saw the involvement of nine local traditional banks, which include the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.Related reports suggested that India’s central bank — the Reserve Bank of India (RBI) — plans to launch the digital rupee for the retail segment within a month in select locations.

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Funding rates hit 6-month high before CPI — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts the second week of November battling some familiar FUD — how will BTC price action react?The largest cryptocurrency managed a weekly close just below $21,000 on Nov. 6 — an impressive multi-week high — but remains fixed in a sticky trading range.Despite seeing highs of nearly $21,500 over the past week, there has yet to be a catalyst capable of breaking the market status quo, but the coming week has as good a chance as any of doing so. Nov. 10 will see key United States inflation data for October released, while jobless claims and multiple speeches from Federal Reserve officials may also impact risk asset volatility.An unexpected twist from within the crypto realm comes in the form of turmoil involving exchange FTX, Alameda Research and Binance.Concerns over liquidity have escalated as Binance CEO, Changpeng Zhao, reveals a plan to sell off his platform’s entire stash of FTX’s proprietary token, FTT.Bitcoin reacted in line with market sentiment overnight, but going forward, will the debacle prove any more than classic crypto FUD?Cointelegraph takes a look at some of the major factors set to influence BTC price action in the coming days.FTX worries disrupt weekly closeWhile falling into the weekly close, BTC/USD still managed to post its highest such weekly candle close since mid-September.Data from Cointelegraph Markets Pro and TradingView shows the week to Nov. 6 being capped at $20,900 on Bitstamp.BTC/USD 1-week candle chart (Bitstamp). Source: TradingViewWith that, Bitcoin defends its trading range and avoids any noticeable break of its current paradigm — lurching between $19,000 and $22,800 since August.While heading nearer the top of the range, the FTX news involving Binance appeared to dampen the mood significantly, ultimately costing Bitcoin the $21,000 mark.“As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT),” Binance CEO, Changpeng Zhao (also known as “CZ”) wrote in a Twitter thread. “Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books.”Zhao added that divesting itself of its FTX holdings would take Binance “a few months,” acknowledging that markets could be impacted throughout.In his own thread, Sam Bankman-Fried, CEO of FTX, meanwhile referenced what he called “unfounded rumors” regarding liquidity issues.“We’re grateful to those who stay; and when this blows over we’ll welcome everyone else back,” he wrote in one optimistic post to followers overnight.The market reaction has so far been less positive; a look at the top ten cryptocurrencies by market cap shows 24-hour losses on some tokens nearing 10% at the time of writing.For Bitcoin traders, it is time to take advantage of the retracement in a week they believe should result in further upside.“Lost lower time frame support. Nice little pullback. Will be looking to re-long when it finds it’s next support,” popular trading account IncomeSharks wrote in an update.A separate post focused on potential cross-crypto gains.“Total marketcap looking great on the daily. Bull or bear, I think there’s enough people still sitting on cash to push up to 1.5 trillion,” it read.Total crypto market cap 1-day candle chart. Source: TradingViewMichaël van de Poppe, founder and CEO of trading firm Eight, also said that he would be looking for “buy the dip opportunities” across crypto in the short term.A classic counter-perspective came from fellow trader Il Capo of Crypto, who argued that $21,500 will mark the high point in a downtrend set to continue.“Seeing whales wanting to fill asks at 21500. A very quick scam pump to this level would be the perfect end of the party. ETH to 1700s,” part of a tweet stated.CPI and U.S. midterms in focusThe Federal Reserve dominated the last week of October when it came to crypto-asset performance thanks to its decision to raise interest rates by another 0.75%.As this is implemented, markets will be watching another key figure this week — Consumer Price Index (CPI) data for October.Estimates put year-on-year inflation at 7.9%, as per economists surveyed by Bloomberg, down 0.3% versus September.Any lower-than-expected CPI readout could be a boon for crypto and riskassets, as it notionally increases the chances of the Fed pulling back on rate hikes sooner.Before CPI and jobless claims, however, there is the issue of the U.S. midterm elections to deal with — a potential source of volatility in and of itself.“Personally, I am in no rush just yet to start buying,” well-known social media personality @CryptoGodJohn told followers. “CZ vs SBF drama, Midterm elections Tuesday, CPI Thursday. This will be the biggest week of crypto that will set the tune for the end of the year.”The rate hike announcement was something of a fake tone-setter, having sparked volatility which canceled itself out within days.Fellow commentator Capital Hungry meanwhile warned of the impact of stronger CPI inflation:“If US CPI this week is still high we are going to see that upside on gold reversed, USD strength back and Equities bears back in play.”The U.S. dollar index (DXY) was making up for lost ground at the time of writing, having seen a dramatic 2% daily decline on Nov. 4.U.S. dollar index (DXY) 1-day candle chart. Source: TradingViewFunding rates run hotIn a warning signal to bulls — and particularly late longs — Bitcoin funding rates are surging on derivatives exchanges.As noted by Maartunn, a contributor to on-chain analytics platform CryptoQuant, funding rates are now at their highs in six months.Funding rates are a mechanism used in perpetual contracts to keep their price close to the Bitcoin spot price. Highly positive funding rates suggest that the market expects BTC/USD to go higher and traders are paying for the privilege to go increasingly long BTC.The effect can be detrimental, as a price decrease ends up liquidating large numbers of overly bullish positions.“And at this moment, Funding Rates are very high. Traders are betting on higher prices and are willing to pay a serious amount of interest,” Maartunn explained alongside CryptoQuant data. “That doesn’t have to be bearish perse, but when price start to move against them they might be forced to get out their position or it will be liquidated.”Bitcoin funding rates annotated chart. Source: Maartunn/ TwitterAs Cointelegraph reported, last month saw record liquidations for 2022 as Bitcoin made its way to $21,000.Maartunn added that funding was “something to keep an eye on in the coming days.”Miners miss out on difficulty readjustmentBitcoin’s network fundamentals remain in an interesting, if not wholly bullish state.The latest data from on-chain monitoring resource BTC.com confirms that network difficulty decreased by 0.2% on Nov. 7 — far less than previously estimated.Bitcoin network fundamentals overview (screenshot). Source: BTC.comThe result has implications for miners, who have seen profits squeezed even as hash rate hits new all-time highs.A major difficulty decrease would have helped level the playing field for some, and its absence keeps up pressure on certain players.Even Bitcoin’s largest public miners are “underperforming BTC heavily” in the current environment, Sam Rule, market analyst at UTXO Management, revealed last week. As Cointelegraph reported, the combination of high hash rate and low miner profitability is nonetheless a potential cause for classifying Bitcoin as undervalued.The Bitcoin Yardstick continues to edge further into its “cheap” zone this month, having seen rare lows.Bitcoin Yardstick chart. Source: GlassnodeSentiment gauge hits three-month highIt might not all be doom and gloom for crypto market sentiment.Related: Buying Bitcoin ‘will quickly vanish’ when CBDCs launch — Arthur HayesAccording to the Crypto Fear & Greed Index, cold feet are getting shaken off in Bitcoin’s run to its highest since September.Fear & Greed, which measures sentiment with a normalized score of 0-100 using a basket of factors and offers various labels — extreme greed, greed, neutral, fear and extreme fear — to categorize them, reached its highest since mid-August at the weekend.At 40/100, the optimism proved unsustainable thanks to the market retracement into the new week, and as of Nov. 7, 33/100 is in place — firmly within the “fear” bracket.Crypto Fear & Greed Index (screenshot). Source: Alternative.meThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Inflation is killing us; cryptocurrency alone cannot beat it

Much like a pandemic, inflation has spread throughout the world, clouding the future with dark uncertainty. Disagreement over how to best manage soaring prices in the United Kingdom nearly caused its economy to collapse and subsequently led to the resignation of Prime Minister Liz Truss after just 44 days in office. Currently, at least 10 emerging economies are hyperinflationary, with more expected to follow. And the Federal Open Market Committee (FOMC), the part of the U.S. Federal Reserve responsible for keeping prices stable, just announced higher interest rate hikes in the midst of a return to positive gross domestic product — signaling continuing inflation troubles ahead.The worldwide struggle to reduce inflation is tangible evidence that yesterday’s central bank tools are inadequate for today’s monetary problems. But hope for a brighter, sustainable tomorrow might be found in a technology least expected by policymakers: blockchains.As the world’s de facto reserve currency, all countries rely on U.S. dollars for trade. When times are good, that seems to suit everyone just fine. But during times of high inflation, the purchasing power of dollars falls sharply, forcing other countries to buy more dollars to maintain stability. And yet, periods of high domestic inflation are exactly what compel the Fed to reduce dollar liquidity via interest rate hikes — effectively encumbering international dollar-buying. This dilemma between easing domestic inflation pressures while meeting the liquidity needs of the world is called the Triffin dilemma, and it arises whenever a credit-based national currency, like the U.S. dollar, is used as a global reserve.Related: Jerome Powell is prolonging our economic agonyIn practical terms, Triffin-impaired monetary policy causes financial crises originating in advanced developed countries to rapidly spread across the world. (The Triffin Dilemma does not spark high inflation in advanced economies; instead, it acts as an accelerant, like gasoline, that spreads high inflation everywhere, rapidly.) These crises disproportionately harm the poor, dramatically erasing many of the advancements in equity, economic security, and poverty reduction made during boom years, invariably causing global growth to end in global bust. This repeating boom-bust cycle, where great steps backward are made after every leap forward, highlights the critical need to reform and modernize our international monetary system.Interestingly, we have known how to solve Triffin-related inflationary contagion long before Robert Triffin first identified the phenomenon in the 1960s. At the Bretton Woods Conference following World War II, John Maynard Keynes explained that Depression-era global inflation could be effectively managed by avoiding the use of national currencies for international trade and, instead, getting nations to agree to use a value-stable global reserve. Though Keynes’ proposal was never implemented, the idea was well ahead of its time.As nearly eight decades have passed since Bretton Woods, let’s unpack what this means in 2022.Back in 2009, in the midst of the last financial crisis, several countries called for Keynesian-like reforms, insisting on the use of the International Monetary Fund’s Special Drawing Rights — essentially, units of account backed by a basket of currencies — to be used more broadly as a global reserve. Thirteen years later, we can confidently say these proposals didn’t go anywhere. We still rely on U.S. dollars for international trade, and there appears to be little political will to change the status quo. Effective reform of the financial system, it seems, may not be possible through existing policy channels.Consumer Price Index (CPI) 2002-2022. Source: Bureau of Labor StatisticsBut something new and disruptive has been brewing over the last few years. The advent of blockchains has made creating new, counterfeit-resistant digital currencies a straightforward task, and a growing movement in peer-driven, non-central-bank finance (decentralized finance, or DeFi) has given rise to a global community of people willing to experiment with privately issued digital currencies.In response to the growing use of these alternative currencies, nearly all of the world’s central banks are investigating the issuance of central bank digital currencies, or CBDCs. These are public digital dollars and euro and yuan powered by blockchains, implemented with the intention of rendering privately issued cryptocurrencies obsolete.However, recent research by Linda Schilling and others revealed that CBDCs will likely fail over time. Specifically, there exists a CBDC trilemma, where CBDCs cannot simultaneously be financially stable, price stable, and efficient. In other words, CBDCs do not solve any of the problems we have with existing currencies, yet they create potentially catastrophic new problems under the guise of forward-thinking innovation.A genuine solution, however, may be within sight. The collision of today’s extraordinary conditions, of new technologies and crises and communities, means it has never been easier for a private party to issue a scalable, non-inflationary reserve currency to complement the U.S. dollar. Not an anti-dollar per se, but a value-stable cryptocurrency, tailor-made to reduce inflation, and designed specifically for cross-border settlements — effectively solving the Triffin dilemma and alleviating inflation pain for billions of people.To be fair, some have already attempted this. Ripple’s XRP (XRP) token was once touted as a possible global reserve, and some Bitcoin (BTC) enthusiasts support a total transition from fiat currencies to Bitcoin. However, in a Federal Reserve Bank of Philadelphia working paper, researchers showed that fiduciary cryptocurrencies — tokens backed solely by user trust — may be hyperinflationary over time if governments do not step in to limit the creation of competing cryptocurrencies. (The idea is that, if people keep making cryptocurrencies, one day there will be so many cryptocurrencies in circulation that all cryptocurrencies will eventually become worthless.)Related: Mass adoption will be terrible for cryptoA truly viable global reserve currency will likely have to break from this fiduciary tradition and be anchored to a stable value.But none of these concerns seem to be keeping software developers from experimenting with DeFi. There are cryptocurrencies designed for a variety of user needs, from privacy-focused tokens used largely for darknet market transactions to network-specific currencies used to power transaction verifications.These types of limited practical use cases might be an important distinction for a viable reserve cryptocurrency. The point is not to compete with the dollar, but to give other nations an alternative to the dollar during periods of heightened volatility — in essence, an anti-inflation cryptocurrency to help shift the world away from endless boom-bust cycles and towards steady, sustainable global growth.One day, many years from now, people will look back on what we did to prevent an impending global catastrophe. Were we content to fiddle with interest rates as the world descended into chaos, or did we commit to bold modernization during a time of great uncertainty? Whatever history remembers of us, the question our actions today will answer is this: If we are indeed living under a broken system where our best policy tools cannot save us from imminent economic failure, why are we not trying something new and different?It is time for us to take courageous, decisive action and write a new Bretton Woods Agreement to safeguard the world’s future — but this time, in Solidity.James Song is a behavioral economist and software developer specializing in sustainable digital currencies. He completed his undergraduate career at Harvard University and received a master’s degree in neuroscience from University College London.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Bitcoin’s $20K support looks weak, but pro traders are neutrally positioned

Bitcoin (BTC) has been lingering above $20,000 for the past 9 days, but worsening conditions from traditional markets are causing traders to doubt if the resistance will hold.On Nov. 3, the Bank of England raised interest rates by 75 basis points to 3%, its largest single hike since 1989. The risks of a prolonged recession also increased as the monetary policy committee struggled to contain inflationary pressure.The U.K. monetary authority noted that its most recent growth and inflation projections present a “very challenging” outlook for the economy. The statement from the committee added that “high energy prices and tighter financial conditions weigh on spending,” thus negatively pressuring the employment data.The U.S. Federal Reserve also hiked interest rates on Nov. 2, the fourth consecutive raise, which brings rates to the highest levels since January 2008. The confirmation of a conservative approach from central banks can partially explain why Bitcoin failed to break the $21,000 resistance on Oct. 29 and has since declined by 4.5%.Let’s take a look at derivatives metrics to better understand how professional traders are positioned in the current market conditions.Options traders are not particularly bullishThe 25% delta skew is a telling sign of when market makers and arbitrage desks are overcharging for upside or downside protection. In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew indicator below negative 10%, meaning the bearish put options are discounted.Bitcoin 60-day options 25% delta skew: Source: LaevitasThe delta skew had been above the 10% threshold until Oct. 26, signaling that options traders were less inclined to offer downside protection. A more balanced situation emerged, but the $21,000 resistance test on Oct. 29 was not enough to instill confidence in option traders.Currently, the 60-day delta skew stands at 6%, so whales and market makers are pricing similar odds of rallies and price dumps. However, other data is showing low confidence as BTC approaches the $20,000 support. Leverage buyers ignored the recent rallyThe long-to-short metric excludes externalities that might have solely impacted the options markets. It also gathers data from exchange clients’ positions on the spot, perpetual and quarterly futures contracts, thus better informing on how professional traders are positioned.There are occasional methodological discrepancies between different exchanges, so readers should monitor changes instead of absolute figures.Exchanges’ top traders Ether long-to-short ratio. Source: CoinglassEven though Bitcoin has rallied 9% from Oct. 22 to Otc. 29, professional traders slightly reduced their leverage long positions, according to the long-to-short indicator. For instance, the Binance traders’ ratio improved somewhat from the 1.25 start, but then finished the period below its starting level at 1.22. Meanwhile, Huobi displayed a modest decrease in its long-to-short ratio because the indicator moved from 1.03 to 1.00 in the seven days until Oct. 29.At OKX exchange, the metric slightly decreased from 1.01 on Oct. 22 to 0.94 on Oct. 29. This means that on average, traders were not confident enough to add leverage to bullish positions.Related: Robinhood not giving up on crypto despite Q3 crypto revenue slashing 12%The $20,000 support is weak, but traders are not bearishThese two derivatives metrics — options skew and long-to-short — suggest that the 4.5% Bitcoin price correction since the $21,000 test on Oct. 29 was backed by a moderate level of distrust from leverage buyers. A more optimistic sentiment would have caused the 60-day delta skew to enter the negative range and possibly have pushed the long-to-short ratio to higher levels. It is important to note that even pro traders can misinterpret the market, but the present reading from the derivatives market favors a weak $20,000 support.From an optimistic perspective, there is no indication that pro traders expect a negative move. Basically, nothing changes even if price revisits the $19,000 range because 50 days have passed since Bitcoin last traded above $22,000.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bank of England raises interest rates to 3%, largest jump in 33 years

Desperate times call for desperate measures. The Bank of England, effectively the United Kingdom version of the Federal Reserve, has raised interest rates by the highest rate in 33 years.The Bank of England’s Bank Rate, or the cost of borrowing money, rose by 0.75% to 3%. According to the Monetary Policy Committee (MPC), the Bank of England voted by a majority of 7-2 to increase interest rates to 3%. U.K. Interest rates hockey stick to 3%. Source: BankofEnglandThe U.K. is battling with high, double-digit inflation. The economic situation has not improved in recent months. The U.K. recorded 10.1% inflation in October, the second time in three months.The MPC is responsible for setting official interest rates in the U.K.The Monetary Policy Committee report noted:“Inflation is too high. It is well above our 2% target. It’s our job to make sure that inflation returns to our 2% target.”The pound sterling tumbled to $1.12 upon the news, as investors lost confidence in the pound sterling. The pound recently hit $1.04, an all-time low, and another indicator of waning investor confidence. The pound rose to a recent high against Bitcoin (BTC), kissing 1 BTC = £18,000.The pound sterling dropped 4% on the news. Source: GoogleInterest in crypto has been burgeoning in such an environment. British pound trading volume soared 1,150% in September, while the United Kingdom recently hosted the Bitcoin Collective Conference, which the Chairperson of The Crypto and Digital Assets All-Party Parliamentary Group, MP Lisa Cameron attended. Cameron affirmed to Cointelegraph in an exclusive interview that the U.K. will become an international hub of crypto and digital assets. However, various challenges and regulatory hurdles stand in their way.Related: United Kingdom banks are a threat to crypto, and that’s bad news for everyoneStablecoins were recently renamed by the group, and the new Prime Minister, Rishi Sunak has expressed interest in crypto. Notwithstanding, the economic backdrop in the United Kingdom is increasingly concerning. British Economist Ed Conway commented that the U.K. is already in a recession, which could be the longest since records began. The MPC predicts inflation will fall sharply from the middle of 2023.

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