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2023-01-13 18:17:42
US stock market
US stocks continued a losing session because the third quarter report of companies was worse than expected. Green stock futures are slightly back. Gold and oil rose slightly and traded at $1,669 per ounce and $88 per barrel, respectively.
Stocks fell as major companies reported less-than-expected results. Meta reported a second consecutive quarterly revenue decline. The company is facing a widespread slowdown in online ad spend, challenges from Apple’s iOS security update, and increased competition from TikTok. In addition, Meta has posted consecutive quarters of revenue declines and expects a third consecutive decline in the fourth quarter. The company’s Reality Labs division, which hosts VR headsets, lost more than $9 billion in the first three quarters. This caused Meta stock to continue to drop 19% in yesterday’s trading session. At an after-hours level of around $108, Meta stock is trading at its lowest level since March 2016.
Besides Meta, Microsoft and Google also performed well below investors’ expectations. Shares of these companies also dropped after the third quarter business results were announced.
As for BTC, it has recently been found to have a lower volatility and even more stability of stocks. The drop in volatility could also be because Wall Street investors are no longer storing as many cryptos as they used to. Short-term investors are also the group that sold BTC when the price plummeted. Because they are people with great financial resources and when selling creates great volatility in the market.
After the short squeeze, the leverage in the market is still high
In contrast, Bitcoin has been slightly up over the past day in part because of the short squeeze. Altcoins in supply followed suit, with ETH rallying back to the $1500 mark.
Short squeeze caused more than 1 billion USD of leveraged orders to be liquidated and mostly Short orders. It is remarkable that more than 83% of the liquidation value comes from the FTX exchange, while other major exchanges such as Binance, Huobi, … only account for a small part. However, the number of leveraged orders has remained high since July, according to CryptoQuant data. Not only that, the hit rate is also very high.
Over the past month, the number of BTC on the exchange has continued to decrease. As for the spot floor, the number of BTC has decreased recently, but the number of deposits on the exchange has been higher in the past day. But the derivatives exchange, on the other hand, has a certain amount of BTC withdrawn from the exchange. Maybe investors/investors bring BTC to the exchange to create a position for themselves and then withdraw.
Profitability of BTC remains low at 58%.
Ethereum has a recent drop in withdrawals. The amount of ETH on the exchange seems to be flat and has not changed much after The Merge.
Major economies are unstable
Not only the UK economy is unstable, but Japan is no less. The yen has continued to depreciate against the dollar despite the efforts of the Japanese government. The Bank of Japan still does not want to raise interest rates until next year. Therefore, the demand to own Japanese bonds is at a very low level, there may not be any transactions for a few days. The government must intervene to use the dollar to buy yen. Or the fact that the central bank of Japan is holding more than 50% of public bonds.
Recently, Kyodo news agency reported that Japan may spend $454 billion in a new scheduled support package to cushion the economic blow caused by rising raw material costs. The yen is down, inflation is high and the Japanese people are still bearing the brunt of rising costs from gas, gasoline and electricity. Part of this support package is to help reduce bills for residents and oil wholesalers to reduce prices.
Canada raises interest rates less, the pressure of the Fed
Canada has also reduced the odds of a rate hike due to fears of a possible recession in the country. Expected to raise the benchmark interest rate to 0.75% (after having increased it by 0.75% in September and 100 points in July), the Bank of Canada instead increased only 0.5% and raised the interest rate to 3.75%.
Shortly after the Bank of Canada news, the US Census Bureau reported new home sales in September fell 10.9% as interest rates continued to soar. Weak economic data may be a pressure factor for the Fed to reconsider raising interest rates and re-adjust the pace of monetary tightening.
Sen. Sherrod Brown this week sent a letter to Fed Chairman Jerome Powell expressing concern about the impact of a rate hike on jobs. In the letter, Mr. Brown wrote: “It is your duty to fight inflation, but at the same time you must not lose sight of your responsibility to ensure that we have full employment.” And excessive monetary tightening will only exacerbate these problems for the working class.
In addition, yield curve inversions have appeared several times recently. It is one of the signs of a financial recession. However, the Fed still does not acknowledge this.
The Fed is under pressure from many sides, from politics to investors and international monetary authorities. As an independent agency within the government, whether the Fed will change its mind or remain firm in its stance of raising interest rates. Investors still believe that the Fed will continue to raise interest rates by 0.75% and prepare for this.
Other information:
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In line with the conflict of war between the two market watchdogs, CFTC president Rostin Behnam has reiterated that Bitcoin (BTC) and Ethereum (ETH) are commodities, not securities. Although SEC Chairman Gary Gensler is willing to call Bitcoin a commodity, Rostin Behnam does not share the same view as other assets such as Ether and XRP.
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Cryptocurrency exchange Binance has released a new service called Binance Oracle to help blockchain applications connect to real-world data. The oracle solution will aggregate the off-chain data needed by applications such as those in the decentralized finance sector. Binance Oracle will leverage the use of “threshold signatures”, a type of cryptographic engine that will be used to securely sign data feeds into blockchain applications. This cryptographic mechanism will ensure that there are no error points in the feeds.
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