Bitcoin Resilient as Major Crypto-Firm Cuts More Jobs
BTC/USD Analysis
The past year has been extremely bad for the crypto-industry, which continues to reel from the recent FTX collapse. Yesterday, crypto-firm Coinbase announced that it will lay-off 950 employees, which accounts for around 20% of its workforce, as part of an effort to reduce operating expenses. [1]
CEO Brian Armstrong pointed to FTX as he talked of "unscrupulous actors in the industry", but expressed confidence that recent developments will eventually end up benefiting the firm. Coinbase though had slashed another 1,250 jobs back in June, well before the FTX bankruptcy. [2]
Despite these negative news, BTC/USD is having a good week, benefiting from market optimism for a less aggressive Fed, which works against the USDollar. CME's FedWatch Tool prices-in a small 25 basis points hike in the next meeting and chair Powell did not push against that yesterday. [3]
The US central bank however has maintained a very hawkish stance, projecting a median terminal rate of 5.1%, while last week's minutes highlighted that no participants see rate cuts this year, contrary to market expectations. [4]
BTC/USD is now in position to take another crack at the 38.2% Fibonacci of the November high/December low slump, bur does not yet inspire confidence for sustained strenght past 50% (18,384), as the upside looks unfriendly.
After a strong start to the week, BTC/USD faces difficulties today, while the Relative Strength Index (RSI) did not follow it higher yesterday. This divergence can lead to renewed pressure towards 16,257, but strong catalyst will be required for a breach of the 2022 low (15,455).
Market participants now turn to Thursday's US CPI Inflation update, which can affect the Fed's thinking and determine the next leg of the cryptocurrency.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 10 Jan 2023 https://www.coinbase.com/blog/a-message-from-ceo-and-co-founder-brian-armstrong-to-coinbase-employees | |
| Retrieved 10 Jan 2023 https://blog.coinbase.com/a-message-from-coinbase-ceo-and-cofounder-brian-armstrong-578d76eedb12 | |
| Retrieved 10 Jan 2023 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html | |
| Retrieved 10 Dec 2023 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20221214.htm |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.