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Ethereum, Bitcoin Slide Further Through The Weekend – Decrypt

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The sugar high of the Ethereum merge on Thursday led into a dour weekend of red for both the newly miner-free ETH and top crypto Bitcoin.
Ethereum is down from its pre-merge perch of $1,580 to $1,335 as of this writing, following a steep drop of 6% within hours of the merge and down 15% overall late Sunday.
Bitcoin, meanwhile, fell to $19,414 on Friday, and saw a brief rally take it above $20,000 on Saturday. The boost was shortlived, however, with the largest cryptocurrency by marketcap returning to its Friday lows as the weekend drew to a close.
Ethereum was down 22% for the week, and Bitcoin was down 10%. The declines echo a similarly down previous week in which overall economic metrics—ranging from the Consumer Price Index to traditional market indicators Nasdaq and the S&P 500—also fell.
But Ethereum's sinking fortunes following the merge belies some analysts' assertions immediately following the upgrade that the impact of the merge on the value of ETH had already been priced into the market.
After the biggest event in Ethereum’s history since launch, it’s price movements still largely mirror Bitcoin’s.
The Merge success was already priced in, or was insignificant short-term to the market? pic.twitter.com/hUsx2ThDBg
— Tim Haines 🇺🇦 (@TimHaines) September 15, 2022

Prior to the conversion, some had even predicted a "merge surge," But the momentary jump in the price of ETH quickly evaporated. Prominent crypto Twitter commentator Doctor Profit announced today that he had sold all of his Ethereum.
$ETH sitting at key support, breakdown = RIP 💀 pic.twitter.com/025LyMCGr8
— Doctor Profit 🇨🇭 (@DrProfitCrypto) September 18, 2022

The weekend also brought reports of the first "replay attack" targeting the Ethereum and the recently hardforked EthereumPoW blockchains. As with the invalid blockchain setting that briefly delayed the launch of ETHW, this exploit was caused by the failure to verify the chainlink ID to determine on which blockchain a transaction was taking place.
1/ Alert | BlockSec detected that exploiters are replaying the message (calldata) of the PoS chain on @EthereumPow. The root cause of the exploitation is that the bridge doesn't correctly verify the actual chainid (which is maintained by itself) of the cross-chain message.
— BlockSec (@BlockSecTeam) September 18, 2022

As for Bitcoin, its total market cap was headed back toward its six-week low of $18,661 on Sept. 6, territory it hasn't touched since the end of June. Bitcoin's total market cap was back below $375 billion on Sunday, a threshold last breached on Sept. 6 and not since July 13 before that.
For his part, Doctor Profit—whose main claim to fame is predicting $18,000 as the "ultimate bottom" for Bitcoin as early as April 2021—said that "the bottom is being formed" with a likely prince range of $18,000 to $25,000 through next March.
#Bitcoin enters the ‚Bottom‘ phase, expecting targets between $18.000 and $25.000 till March 2023. The bottom is being formed. I will keep accumulating at these prices
This is based on TA only. Please consider FEDs next decisions. 0.75 already priced in, 1bps and we see blood. pic.twitter.com/LRAgoBl6va
— Doctor Profit 🇨🇭 (@DrProfitCrypto) September 18, 2022

But a lot hinges on the next move announced by the U.S. Federal Reserve, he warns. While Doctor Profit feels Bitcoin's price can withstand a 0.75 basis point increase in interest rates, a full 1 basis point will mean "we see blood."
"Once the FED decides the great reset, all of us will be fkd," he tweeted.
The last Federal Reserve meeting in July yielded a 0.75% increase. The next meeting, set for Sept. 21, will likely bring another increase—the main question being how big an increase. Some are expecting Federal Reserve Chairman Jerome Powell to announce a full percent hike.

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Bitcoin recovers above $19,000 after finding a new low for the month – CNBC

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Is The Bitcoin Price Being Suppressed By Central Planners? – Bitcoin Magazine

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With the continual rejection of a bitcoin spot ETF but approval of a futures ETF, the SEC is tipping the scale in favor of controlling the market.
This is an opinion editorial by Seb Bunney, co-founder of Looking Glass Education and author of the Qi of Self-Sovereignty newsletter.
“History never repeats itself, but it does often rhyme.” — A quote commonly misattributed to Mark Twain.
Lately, I’ve been pondering whether we are witnessing a rhyming of history.
For those who have had the chance to dig into our monetary history, you may have encountered a little-known policy called Executive Order 6102. It was a momentous attack on the sovereign individual and the free market. An event that corralled U.S. citizens away from gold, into the U.S. dollar and assets from which the U.S. government benefits.
During the Great Depression, President Franklin D. Roosevelt issued Executive Order 6102 on April 5, 1933, forbidding the hoarding of gold coin, gold bullion and gold certificates within the continental United States.
At that time, the Federal Reserve Act of 1913 required any newly issued dollar bills to be 40% backed by gold. Executive Order 6102 freed the Fed from this restriction as it could coercively obtain more gold than it otherwise would have been able to by restricting the usage of gold and purchasing it back at an exchange rate defined by the government.
Moreover, pushing people out of gold and into U.S. dollars helped strengthen the dollar during a period of monetary expansion and central bank intervention.
This Executive Order was in effect until December 31, 1974, when congress once again legalized private ownership of gold coins, bars and certificates.
With an understanding of Executive Order 6102, I wanted to shed some light on modern government thinking.
In the eye-opening book, “The Mr. X Interviews: Volume 1,” Luke Gromen takes the reader on a journey through the past, present and future macroeconomic environment. Although the book details many captivating events, one event in particular stood out to me. Groman cites a leaked document from the U.S. State Department dated December 10, 1974. Here is an excerpt from that document:
“The major impact of private U.S. ownership, according to the dealers’ expectations, will be the formation of a sizable gold futures market. Each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison. Also expressed was the expectation that large-volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long-term hoarding by U.S. citizens.”
Essentially, the government knew that by promoting the gold futures market, gold would experience a significant increase in price volatility, diminishing its desirability and reducing long-term hoarding. More importantly, this document was dated 21 days before they reinstated the ability for individuals to own gold again.
If people are disincentivized to store their hard-earned savings in a stable vehicle such as gold, they must look elsewhere. With equities and corporate bonds exposing the investor to greater risk and volatility, people have two options: government bonds or U.S. dollars, both benefiting the government.
The government has shown that it no longer needs to overtly issue an order such as 6102 to ban the holding of gold. It just needs to reduce gold’s desirability to achieve the same effect.
In October 2021, the Securities and Exchange Commission (SEC) approved the first Bitcoin futures Exchange Traded Fund (ETF). For the less financially inclined, an ETF is a regulated investment vehicle that simplifies the purchasing of its underlying assets. For instance, if you purchase the SPY ETF, you can own exposure to the hugely popular S&P 500, without purchasing 500 individual stocks.
On its own, the futures market is no cause for alarm, but when the SEC prevents corporations and individuals from purchasing BTC through regulated means, only allowing futures ETFs, we have an issue.
Let me explain.
Companies in the Bitcoin industry have been applying for a “spot Bitcoin ETF” for many years, but to no avail. If this spot ETF were to get accepted, you could invest $100 into the ETF, which would then purchase $100 of bitcoin held by the fund, giving you direct exposure to bitcoin. This would provide pension funds, corporations, asset managers, etc., easier access to bitcoin. But this is not yet available in the U.S.; only a futures ETF is.
If not already evident from the gold futures explanation above, this may pose a threat to bitcoin.
When someone purchases a bitcoin futures ETF, they do not own bitcoin. Instead, they own exposure to an ETF which holds bitcoin futures contracts. In short, this futures ETF purchases contracts for the delivery of bitcoin at a future date. As that date approaches, it rolls the futures contract, selling the old contract and purchasing a new contract further out.
Don’t worry if you don’t quite understand how these ETFs work. The point here is not to understand the functionality but rather the drawbacks.
It is essential to understand two characteristics of futures ETFs over spot ETFs. In regular, functioning markets, if you want the right to buy something at a specified price in the future, you pay a premium over today’s price, and the further out in time you wish to lock in a price, the more premium you pay. Each time the contract is rolled, more premium is paid. This is called roll yield.
Even if bitcoin’s price stays the same throughout the life of the futures contract, the ETF will still decline in value because the ETF is paying a premium to purchase the right to buy bitcoin in the future. As that date nears, it’s selling the contract and purchasing a new one further out in time. This is known as rolling.
A byproduct of this rolling is that any paid premium diminishes as contract expiration approaches (roll yield). This creates a decay in the value of the ETF and is incredibly unfavorable for long-term holders.
As a result, this decay incentivizes short-term trading, increased volatility and short selling of the ETF as a portfolio hedge, suppressing the price.
Is it possible to see the effects of these futures ETFs in action? Below is a chart from Willy Woo. The date of the approval for the first futures ETF was in October 2021.
(Source)
Immediately preceding the inception of the first regulated futures ETF, we saw a considerable increase in futures dominance. The futures market currently dictates 90% of bitcoin’s price (green line in the chart above).
In summary, just like gold from the 1930s to the 1970s, individuals and corporations alike have no regulated way to purchase bitcoin efficiently for long-term storage. The only difference being in the age of censorship, rather than overtly suppressing what the government deems as unfavorable or infringing on certain aspects of the economy, it can covertly suppress them. However, not all hope should be lost.
Many people and corporations are tirelessly petitioning for the approval of a spot ETF, a way to gain direct exposure to bitcoin. But this begs the question: Is bitcoin one of the last remaining bastions for the free market and self-sovereign individuals, or is it already under the thumb of the central planners?
This article was originally written for Seb Bunney’s weekly newsletter exploring what it means to be free in an increasingly not-so-free world.
This is a guest post by Seb Bunney. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Why is Bitcoin price up today? – Cointelegraph

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Bitcoin, altcoins and stocks rallied after data showed United States payrolls surged, but is the current bullish momentum sustainable?
Bitcoin price is up on Nov. 4, and a marketwide rally in crypto prices suggests that Bitcoin (BTC), BNB (BNB) and Ether (ETH) are starting the month of November in the black. 
Bitcoin and the market are fighting back after the United States Federal Reserve’s Nov. 2 announcement of a 0.75 basis point interest rate hike that, at first, had a positive impact on equities and cryptocurrency markets, then led to a market downturn.
Despite the downward pressure, Bitcoin maintained the $20,000 price floor and now is over $21,000 as the general market responds to strong jobs numbers and employment data. 
The jobs report shows that payrolls grew 261,000 in October as labor participation fell. The report sent equities upward as investors analyzed the numbers to show an overall resiliency in the market even against the expected Federal Open Market Committee (FOMC) rate raise of 0.75%. 
As reported by Cointelegraph, Bitcoin and other cryptocurrencies like Ether and BNB will likely remain closely correlated to U.S. equities and display the same price dynamics. 
Hand in hand with Bitcoin’s growth, most major cryptocurrencies — including Ether, Bitcoin Cash (BCH), Solana’s SOL (SOL), Cardano’s ADA (ADA), Polygon’s MATIC (MATIC), Ripple’s XRP (XRP) and Tron’s Tronix (TRX) — briefly registered green candles after the jobs announcement. There are several reasons for the recent movement. 
The current rally in BTC and altcoins could indicate an increase in confidence in the market following several key developments.
Here are three reasons why Bitcoin price rallied and then retraced today, and the details of key drivers of the growth.
Since Bitcoin price crashed to $17,600 on June 18, the open interest of BTC futures contracts has been surging. Sharp price moves in Bitcoin price could trigger another liquidation event, but it is difficult to determine whether the move would be to the upside or downside.
Many traders agree that if the Fed were to pivot on its current policy of quantitative tightening and interest rate hikes, BTC price could surge to the upside and liquidate a significant portion of the short interest in futures contracts.
The current price move triggered a wave of liquidations, and one data point to keep an eye on is whether there is a sharp reduction in aggregate open interest. Data shows that $704 million in cross-crypto shorts were liquidated on Oct. 25, helping propel Bitcoin over $20,000. 
Short liquidations directly help push Bitcoin price higher by forcing automated buy pressure. The current rally is seeing open interest gaining momentum after remaining consistent in October, which explains much of the sideways trading as well as the current rally.
Investors’ confidence in the crypto market could also be rising due to their belief that the United States Federal Reserve could roll out smaller-sized interest rate hikes in the next two months. 
In the Fed’s statement, the possibility of policy shift does remain open:
According to MacroMicro, a firm that publishes investors’ consensus estimates on expected changes in interest rates, interest rates may be lower than previously anticipated in the near future. 
The graph above points to a possible slowdown in interest rate hikes. The public sentiment shows that future rates may fall, and investors believe that this has created the possibility for a broad crypto market recovery.
The S&P 500 provides a general overview of the economy in general. Currently, Bitcoin and the S&P 500 share a high correlation coefficient.
Therefore, if interest rates ease and the economy grows, Bitcoin could reverse course if a similar turn-around were to take place in equities markets. The better the macro climate, the better for Bitcoin price. 
Related: Bitcoin bulls face $21K sellers as BTC price wipes out Fed FOMC losses
Bitcoin remaining over $20,000 is significant to traders who view the level as a major psychological support and resistance. On-chain data currently confirms that a $20,000 floor may not be purely speculative but also technically sound. 
Bitcoin’s realized price is currently concentrated between $17,000 and $22,000, highlighting a strong base of holders.
In addition to realized price distribution, Bitcoin long-term holders are not only still in profit, but 60% of all long-term holders are in profit.
Some investors might interpret Bitcoin’s current low volatility, steady consolidation within the $20,000 range and the unwillingness of sellers in the midst of the current equities-driven headwinds as a sign that the price has bottomed. 
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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