First Mover Americas: Bitcoin Unaffected by Bank of England's Super-Size Interest-Rate Hike

• Price Point: Bitcoin appeared unaffected by the news of the Bank of England announcing its biggest interest rate rise in 27 years. The pound dropped against the dollar.
• Market Moves: Omkar Godbole looks at a rare signal hinting bitcoin could be at market bottom and why this might be the best time to add exposure to the cryptocurrency.
• Chart of The Day: The ether-bitcoin ratiobreaks eight-month bearish trendline.

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Price point

There hasn’t been a lot of exciting news this week for bitcoin (BTC) – a possible explanation for its six-day losing streak through Wednesday. But it’s not falling out of bed, either. Over the course of the slide the price of the notoriously volatile cryptocurrency has only lost about 4%.

BTC appeared unaffected by the news that the Bank of England (BOE) raised key interest rates by half a percentage point on Thursday, amid concern U.K. inflation will be over 10% next year.

The bank raised its key rate to 1.75% from 1.25%, the largest single step in more than a quarter-century.

The sterling dropped heavily against the dollar following the statement.

Ether (ETH) was trading down 3% on the day while other altcoins were all mostly in the red. Exceptions included tokens associated with XTZ$0.4847, FTM$0.09569 and Near Protocol NEAR$1.7566, which were all up by 2% over the last 24 hours.

In other news, asset management giant BlackRock (BLK) has partnered with the publicly traded crypto exchange Coinbase (COIN) to make crypto directly available to institutional investors.

Mutual customers of Coinbase and BlackRock’s investment management platform, Aladdin, will have access to crypto trading, custody, prime brokerage and reporting capabilities, according to a blog post Thursday.

Saylor puts full focus on bitcoin

MicroStrategy (MSTR) stock was up nearly 15% on Wednesday, after news broke the prior evening that Michael Saylor is stepping down as CEO to become executive chairman with a sole focus on the company’s bitcoin strategy.

A new report from blockchain analytics company Chainalysis estimates that $2 billion worth of crypto has been siphoned out of cross-chain bridges this year alone, which includes this week's $190 million Nomad bridge exploit.

Developers behind the Solana blockchain are saying the closed-source Slope wallet may be responsible for the ongoing exploit this week that has resulted in millions of dollars’ worth of crypto tokens being stolen from more than 9,000 hot wallets.

A crypto warning for Turkey

Finally, check out this opinion piece from Burak Tamac, senior researcher at CryptoQuant, and economist Erkan Oz on lessons from the Turkish government’s hasty attempt to regulate cryptocurrencies. The authors believe that the government’s views on crypto is a restriction on freedom, and is not only ethically and constitutionally wrong but also would worsen the country’s capital outflow problem rather than solving it.

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Market Moves

Rare Signal Hinting at Bitcoin Price Bottom Emerges

By Omkar Godbole

Predicting a bear market bottom is like catching a falling knife. Even so, traders often attempt to predict one based on how the price behaved relative to critical indicators during previous bear runs. The assumption here is that history will repeat itself.

One such rare signal has emerged, suggesting bitcoin's decline may be flattening and now is the best time to add exposure to the cryptocurrency.

The bitcoin mining difficulty ribbon, comprising short- and long-duration simple moving averages on the mining difficulty, has compressed for the first time in over a year, indicating miner capitulation. The previous bear markets, including the one seen in 2014, ended with the ribbon compression, data provided by analytics firm Glassnode show.

"The bitcoin ribbon data set has historically proven to be an optimal entry point indicator and I believe this time it will show its predictive power again," Markus Thielen, chief investment officer at British Virgin Islands-based IDEG Asset Management (IDEG), said in an email. "We are also entering the 18-months pre-bitcoin-halving period (September 2022) - a time window where bitcoin prices tended to boom out."

Miner capitulation occurs when those responsible for minting coins shut down operations, resulting in a decline in the hashrate and mining difficulty. That reduces the selling pressure, allowing for price stability and an eventual bull revival. Miners often sell coins mined to fund operational costs, adding to bearish pressures in the market.

The ribbon includes 9-, 14-, 25-, 40-, 60-, 90-, 128- and 200-day simple moving averages on mining difficulty, a measure of how difficult it is to mine a block and verify transactions in bitcoin's blockchain.

Recently, several miners have capitulated to stay solvent. Mining difficulty is adjusted every two weeks. The number of participants in the mining network and their total mining power determines whether the difficulty is adjusted lower or higher.

Read the full story here.

Chart of the Day: ETH/BTC's Breaks 8-Month Bearish Trendline

By Omkar Godbole

• The ether-bitcoin (ETH/BTC) ratio's breakout indicates the eight-month bear market has ended and suggests continued ether outperformance ahead.

Latest Headlines

• BlackRock to Offer Crypto for Institutional Investors Through Coinbase Prime: The asset management giant and the crypto exchange have partnered to broaden access to crypto among institutional investors.
• Chainalysis Estimates $2B Stolen From Cross-Chain Bridge Hacks This Year: This week hackers used a vulnerability on the Nomad bridge to steal $190 million worth of crypto.
• Bank of England Raises Interest Rates to 1.75% in Biggest Increase Since 1995: At 1.75%, the rate is now the highest since the start of the global financial crisis in late 2008.
• Gaming Claimed Record 60% of Blockchain Activity in July, DappRadar Reports: DappRadar's latest monthly report looked at blockchain gaming and non-fungible token (NFT) marketplace trends.
• Miner Tomorrow Crypto Looks to Go Public Through SPAC Merger: The proposed merger is expected to close in the fourth quarter of this year, subject to stockholder and regulatory approval.
• UK Parliamentary Group Starts Crypto Inquiry to Form Policy Recommendations: The cross-party group is asking industry experts, regulators and the government to weigh in on a range of topics including consumer protection and central bank digital currencies.
• PwC Crypto Head Departs to Set Up $75M Digital Asset Fund in Dubai, Financial Times Reports: Henri Arslanian's new fund, Nine Blocks Capital Management, has been granted provisional regulatory approval in the Gulf city.
• Fairfax County Pension Fund Invests $70M in Crypto Yield Farming Funds, Financial Times Reports: The Virginia pension fund has a series of crypto investments dating back to 2019.
• Rare Signal Hinting at Bitcoin Price Bottom Emerges: Bitcoin's difficulty ribbon is compressing, hinting at miner capitulation and a market bottom.
• Coinbase Asks US Supreme Court to Halt Lawsuits Connected to Scams and Dogecoin: The company seeks to send the cases to arbitration after federal trial judges earlier rejected such requests.