Overview

• Do Kwon arrest warrant issued.
• Markets plummet after data release.
• Wall Street is coming for crypto exchanges.
• Is Helium moving to the Solana blockchain?
• CME launches options on Ether futures.

Good morning Banter Fam,

Yikes. It was ugly in the markets yesterday, after the Core Price Index (CPI) failed to meet the consensus expectations of 8.1% and came in at 8.3% instead. The report confirms inflation is not receding as much as expected and that the US has a serious problem on its hands.  

Just about every asset plummeted after the release. Well, except the USD, which returned to its parabolic climb.

But some people are happy with the data, like US President Joe Biden. Apparently, they’re proud of making “progress.” Well, with Senate elections right around the corner, it is best they paint a pretty picture

Meanwhile, prices continue to rise for everyday goods. Eggs are up nearly 40%, and I’m feeling the pain at the burrito truck where I pick up breakfast.

Market update 🌍

The market was feeling a little optimistic about the battle of inflation. While the market front-ran the actual data a week before release, CPI clocked in at 8.1% YoY, 0.1% over the expected forecast of 8.0%. The 0.1% difference is not extraordinarily significant, but the market realizes it opens the door for the Federal Reserve to continue increasing rates. As a result, the market is pricing a 33% probability that the FED will raise rates by 100 basis points – a topic Ran covered in Crypto Banter’s main fundamentals show.

BTC/USDT 1D

It looked decent for BTC after it broke through a $21.7k resistance level on the way to testing a low trend resistance (green). Unfortunately, the CPI data set-back confirms BTC’s role as a “risk-on” asset. Investors will likely have another opportunity to buy BTC at the well-tested $19k support. Let’s hope that level holds. BTC completed the daily session down -9.92% to $20,173.

High-resolution chart

ETH/USDT 1D

Although the Merge is less than 24 hours away, the Ether (ETH) price fell considerably along with the rest of the markets. With it, investors’ hope of a downtrend (red) breakout is extinguished, and a visit to the $1,425 support level seems a likely scenario. ETH fell -8.26% to $1,574.

High-resolution chart

Notable Gainers (24h):

Newswatch 📰

Do Kwon arrest warrant issued. South Korea has issued an arrest warrant for Do Kwon, the founder of crypto company Terraform Labs, as it probes alleged illegal activity behind collapsed stablecoin UST. At the time of writing, this has resulted in the LUNA token dropping over 34% in the past hour alone.

Wall Street Giants look to conquer crypto exchanges. Charles Schwab, Fidelity Investments, Citadel Securities, and Virtu finance are some names backing EDX Markets, a crypto exchange in development that promises lower fees. The EDX exchange would utilize network technology used by traditional exchanges and could lower trading fees to negligible levels for customers.

US residents can now recover crypto locked in Tornado Cash. The decentralized crypto mixer, Tornado Cash, was sanctioned by the US Treasury Department last month after allegations that N. Korean hackers had used the service to launder money. US residents with crypto locked in Tornado Cash can now apply for a license to recover assets.

Helium Network is headed to Solana. The Helium community voted in favor of HIP 70, to migrate the project to the Solana blockchain instead of maintaining its chain. The Helium Network is a decentralized wireless Internet of Things network where miners provide IoT coverage in exchange for tokens.

PoolinWallet IOU-Tokens. The wallet service provider for one of the largest bitcoin mining pools has announced plans to issue IOU (I Owe You)-Tokens to those affected by the frozen withdrawals decision last week. The IOUs will reflect a 1:1 ratio of user balance of bitcoin (BTC), Ether (ETH), Tether (USDT), Litecoin (LTC), Zcash (ZEC), and Dogecoin (DOGE). Tokens will be available to trade for the original assets, or to buy additional mining rigs.

News tidbits:

• The Federal Trades Commission (FTC) looks to join the Celsius Bankruptcy case.
• Twitter shareholders approve the Musk buyout offer of $44 billion.
• Binance sued in Italy for exchange outages.
• Prime Minister Justin Trudeau criticizes opposition leaders for recommending bitcoin as an inflation hedge to Canadian citizens.
• Crypto exchange FTX freezes during CPI release.
• CME launches options on Ether futures.

NFT & metaverse update 🐵

• The team behind Bored Ape Yacht Club, Yuga Labs, announces a grant to support the creation of a “Punks-centric” newsletter.

Banter’s take

The bear market is back on.

We actually never left. Just as the hype was beginning to mount in crypto, the persistence of inflation derailed the rally.

The reaction to such a slight incremental difference between the CPI forecast of 8.1% and the actual 8.3% print highlights that we are still in muddy economic waters. Moreover, September was as rough as bitcoin’s historical track record.

So, where do we go from here?

It seems likely the Federal Reserve (FED) won’t pivot its hawkish stance for a long time, and the fight over inflation will be a drawn-out battle. The markets will continue to react harshly to any negative data, and until it begins to improve, it’ll be more of the same. But we can look at it two ways:

1. Pessimistically: the bear market stinks, and I want a bull run.

2. Or, from a more optimistic perspective:  I’ll have more opportunities to buy cheap.

Your choice. But for me, it’s additional time to purchase my favorite crypto assets at great prices.

Gabri

Follow me on Twitter for daily updates!

Disclaimer

Good Morning crypto (issued by Crypto Banter) is a newsletter for entertainment purposes only.

All opinions expressed by the publisher, writers, and chartists should not be construed as financial advice and do not necessarily reflect the views of Crypto Banter. The publisher, writers, and chartists may hold positions in the tokens and assets discussed. Readers are encouraged to do their own research.