Bitcoin Dominance Hits 3.5-Year High as Altcoins Get Left Behind

Cryptocurrency

Summary:

Bitcoin’s market share neared 60%, hitting its highest level since April 2021, while altcoins were muted in the last 24 hours.

Bitcoin’s market share reached its highest level since April 2021 as the cryptocurrency’s price continued to climb amid a muted altcoin market.

Bitcoin’s dominance hit a three-and-a-half-year high of 58.77% during late trading on Oct. 15, the same time it hit a 10-week high of $67,800, according to TradingView.

Bitcoin BTC retraced sharply to $64,880 before climbing back to trade just above $67,000 with a market capitalization of $1.32 trillion. Bitcoin Dominance Hits 3.5-Year High as Altcoins Get Left Behind_1

Bitcoin Dominance Hits 3.5-Year High as Altcoins Get Left Behind_1

Bitcoin’s market cap dominance showing its share of the crypto market.

Bitcoin’s increases in dominance have historically been bad news for altcoins, and BTC gained 2.5% on the day while altcoins traded mostly flat or dropped.

Still, some traders think Bitcoin’s dominance will be short-lived and will soon crash, which they claim will open the market for altcoins to rise.

In an Oct. 16 X post, ICT Crypto founder Benjamin Cowen predicted that Bitcoin’s dominance would top out at 60%, while crypto investor Coach K Crypto claimed Bitcoin’s dominance had peaked for this cycle, telling his 129,000 X followers that Bitcoin “needs to rip” before anything else can happen.

“Soon enough, there’s going to be a breakdown in [Bitcoin dominance],” they said. “This will lead to memecoins and other major altcoins getting a taste.”

Analyst Moataz Elsayed said on Oct. 14 that Bitcoin’s dominance “is about to crash hard” and predicted the start of altcoin season.

Ether ETH is historically one of the first assets to move when Bitcoin’s dominance declines, but the Ether to Bitcoin ratio, a conversion rate of BTC to ETH, is close to its lowest level since April 2021, falling below 0.039 again this week, according to TradingView. Bitcoin Dominance Hits 3.5-Year High as Altcoins Get Left Behind_2

Bitcoin Dominance Hits 3.5-Year High as Altcoins Get Left Behind_2

ETH’s price in terms of BTC has fallen to the lowest level in three-and-a-half years.

Since hitting a fresh all-time high of $73,738 in March, Bitcoin has been trading mostly sideways.

But it’s now approaching a key psychological level — its 2021 high of $69,000, which it held for about three years.

Institutional investors are still keen on BTC with the 11 US spot exchange-traded funds seeing net inflows of $371 million for Oct. 15. The products have seen more than $1.1 billion in aggregate inflows over the past three trading days, according to Farside Investors.

Source: Cointelegraph

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Cohen

Economic

Companies including Amazon.com Inc and Woodside Energy Group Ltd announced projects in Mexico totalling about US$20 billion (RM86.06 billion), a victory for President Claudia Sheinbaum as she seeks to attract investment from wary business leaders.

Economy Minister Marcelo Ebrard said Woodside plans to invest US$10.4 billion to develop a deepwater project with state oil company Petroleos Mexicanos in the Gulf of Mexico. Amazon will spend US$6 billion through 2026 to strengthen its network and digital capacity in the country, he said.

Royal Caribbean Cruises Ltd is planning a US$1.5 billion tourist project in the Quintana Roo state, Ebrard said at a news conference after a meeting of the US-Mexico CEO Dialogue on Tuesday.

Addressing the leaders of about 240 Mexican and foreign companies, Sheinbaum sought to downplay concerns that a series of constitutional reforms will diminish democracy and judicial independence in the country, the largest trading partner of the US.

Among those reforms are a judicial overhaul approved last month in Congress to elect federal judges by popular vote and an energy bill to give state-owned companies priority over private firms in energy generation and power transmission. Critics have said the judicial changes make investment in Mexico riskier because control of the courts is likely to go to Sheinbaum’s popular Morena party.

“The president doesn’t want to control the judiciary,” Sheinbaum said. “What we want is to have a judiciary free of corruption.”

Sheinbaum also said that, although the government wants to control 54% of energy generation and transmission in Mexico, there will be clear rules for private investment in the remaining 46%. During the CEO meeting, the government created working groups with companies to address energy projects.

The government will have its energy plan ready by the end of the year, Sheinbaum said. A set of rules known as secondary laws will define the participation process of private companies in energy projects.

After listening to businesses concerns, the government will create a digital transformation agency to reduce red tape and help companies with investment projects, Sheinbaum said.

The North American free-trade pact known as the US-Mexico-Canada Agreement, or the USMCA, must be strengthened so that the three countries complement each other rather than compete with each other, she said.

Source: The edge markets

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ACY

Economic

Forex

Recent Movements in the Japanese Yen Amid Global Market Dynamics

The Japanese yen (JPY) has recently experienced pronounced depreciation, a trend largely attributed to the sharp rise in U.S. Treasury yields following a robust U.S. jobs report released in early October. This surge in U.S. yields has propelled the USD/JPY exchange rate upward, climbing by nearly five figures in a short span of time. However, as U.S. bond yields appear to have peaked, the likelihood of further significant upside for the USD/JPY pair seems limited. Traders and market analysts now speculate that the rapid upward trajectory may decelerate, leaving the yen's performance increasingly dependent on domestic factors and geopolitical events.

USDJPY H1

Japan’s Political Landscape and the Upcoming General Election

As Japan gears up for its general election, scheduled for October 27, 2024. Prime Minister Shigeru Ishiba, striving for a decisive electoral victory, has emphasized economic stability as a central campaign theme. The government's clear priority lies in mitigating market disruptions, which could have far-reaching effects on an economy already grappling with inflationary pressures. Consequently, the Bank of Japan (BoJ) is expected to exercise caution in its communications to avoid triggering a breakout in the USD/JPY exchange rate above the psychologically critical level of 150.00—a threshold that could aggravate Japan's ongoing cost-of-living crisis by driving up import costs.

Political Challenges Facing the LDP Government

The ruling Liberal Democratic Party (LDP), led by PM Ishiba, continues to hold a dominant majority in the Lower House of the National Diet, bolstered by its coalition partner, New Komeito.

However, political analysts have noted rising discontent within the electorate, with public approval ratings for the current administration significantly lower than those enjoyed by former Prime Minister Fumio Kishida. This growing dissatisfaction has emboldened opposition parties, notably the Constitutional Democratic Party of Japan (CDP), which seeks to chip away at the LDP’s majority. While the LDP is projected to lose some seats in the election, most analysts believe these losses will be manageable, allowing the coalition government to retain a firm grip on power.

Economic Policy and the Cost-of-Living Crisis

In response to mounting public concern over the rising cost of living, Prime Minister Ishiba has pledged to introduce a large-scale supplementary budget, aimed at delivering targeted relief measures by the end of the year. These measures are intended not only to alleviate financial pressure on households but also to reinforce the perception of policy continuity and solidify party unity ahead of the election. However, the exact size and scope of the fiscal stimulus package remain uncertain, leaving market participants to speculate about its potential implications for future monetary policy. The balancing act between providing economic relief and maintaining fiscal discipline will be a key challenge for the government as it navigates this politically sensitive period.

BoJ’s Monetary Policy Outlook and Market Expectations

The BoJ’s stance on interest rate hikes continues to be a focal point for financial markets. Currently, market expectations point to a potential rate hike only by July 2025. However, this timeline may prove overly conservative. With potential tailwinds from fiscal stimulus in China and increased optimism surrounding a soft landing for the U.S. economy, the BoJ could feel pressure to act sooner than anticipated. Some analysts suggest that a rate hike could occur as early as December 2023 or January 2024, especially if wage growth and inflation data continue to align with the BoJ’s long-term targets. The timing of the central bank's policy adjustments will likely be influenced by domestic economic conditions, but external factors, including global market sentiment, could also play a significant role.

Geopolitical and Economic Factors Shaping the Yen’s Future

In the near term, a complex mix of geopolitical and economic factors is expected to influence yen volatility. Key drivers include Japan's election results, shifts in U.S. monetary policy, and economic developments in China. Should the USD/JPY exchange rate breach the 150.00 level, it may spark temporary yen appreciation as traders recalibrate their positions considering political and central bank actions. However, most analysts believe that such movements would be short-lived, with the yen eventually stabilizing as global market conditions normalize after these pivotal events.

In summary, while the yen's immediate trajectory will be shaped by both domestic and international developments, the broader outlook suggests that Japan’s government and central bank will take measured steps to avoid destabilizing currency movements, particularly in the face of heightened political scrutiny and economic challenges. As markets absorb the outcomes of Japan’s election and monitor the BoJ’s policy signals, investors should prepare for a period of heightened uncertainty but ultimately limited long-term volatility.

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Cohen

Economic

Pedro Sanchez is facing the biggest corruption scandal in his six years as Spanish prime minister, raising questions about how long he’ll be able to maintain his grip on power.

At the centre of his problems is a report by Spain’s most important security force, the Civil Guard, that alleges a criminal network was operating inside the transportation ministry in 2020 and 2021, when it was run by one of Sanchez’s closest allies, Jose Luis Abalos. Abalos was a top party official and then transport minister under Sanchez, but he was kicked out of the party caucus earlier this year as a result of the probe.

The alleged racket funnelled cash from public coffers into different businesses, according to an 87-page report by the Civil Guard that was seen by Bloomberg News. The probe was first made public by newspaper El Mundo last week.

The Spanish press has also reported that public money was used to pay a stipend to a woman who had a relationship with Abalos — although he has said no money was involved in the relationship. Abalos himself has not been accused of any wrongdoing. He did not respond to text and voice messages seeking comment.

The graft allegations touching Sanchez’s inner circle have put the prime minister up against the ropes, with the opposition People’s Party, the largest group in parliament, filing a criminal complaint against his party on Monday (Oct 14).

Sanchez was already on the backfoot over his wife’s business dealings. Begona Gomez is being investigated for possible influence peddling over her relationship with two universities. Sanchez has said his wife has done nothing wrong and the probe is politically motivated.

In April, the pressure on his wife prompted Sanchez to step back from his duties for five days to consider his future before ultimately deciding to continue.

Corruption is a particularly sensitive issue for Sanchez because he came to power in 2018 by denouncing the graft in the PP government under his predecessor Mariano Rajoy.

The 52-year-old Socialist has survived in power since then at the head of a series of increasingly perilous coalitions and currently needs the backing of at least eight different parties to pass legislation.

Despite consistently polling behind the PP for the past two years, Sanchez has become a master of navigating the ideological divisions driven by Catalonia’s failed push for independence in 2017.

For example, the five lawmakers from the Basque Nationalist group PNV are sympathetic to the PP’s pro-business agenda and could topple Sanchez if they chose to align with the opposition. But any alternative majority would have to include the far-right group Vox and that would be extremely uncomfortable for the PNV because of Vox’s vehemently nationalist agenda.

What’s more, Sanchez’s Socialists have cut deals to help the PNV govern in the Basque region and several major cities, so pulling its support for Sanchez would put its own power base at risk. The Catalan separatists of Junts are also closer to the PP in terms of their economic philosophy but would also struggle to line up alongside Vox.

Meanwhile, among the plethora of small left-wing groups that support Sanchez — which include the government’s junior coalition partner Sumar — concerns over the premier’s future are limited, according to two people familiar with the situation. At this stage, no charges have been filed and it seems limited to a specific ministry, said one person. Left-wing voters are far more focused on issues such as affordable housing and are paying little attention to corruption, said another.

Source: The edge markets

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FxPro

Economic

The UK unemployment rate fell to 4.0% in August, the lowest since January, and went down from a peak of 4.4% in April and May. The data beat expectations and supported Sterling buying from intraday lows below 1.3040. Employment figures have been gaining momentum in recent months, with 373K more jobs created in July and August than in the previous three months.

However, the situation is not so rosy when looking at the figures in a broader context. Firstly, the ONS publishes its preliminary estimates for September, which show a fall of 15k in the number of people in work. Second, the number of people claiming unemployment benefits rose by 27.9K in September, bringing the total over the past six months to almost 225K. Thirdly, job vacancies fell by 34K in the three months to September, confirming the cooling of the labour market.

The continued slowdown in wage growth is also worrying. They were 3.8% higher in the three months to August than in the same period a year earlier. Excluding bonuses, the increase was 4.9%. This is above the 2.2% inflation rate but builds on a slowing trend that has been in place since the middle of last year.

The markets seem to have used the new data to take profits from the previous decline in the GBPUSD. The pair has gained 0.2% since the start of the day and has climbed to the 1.3080 level, last Thursday’s high. Technically, there are no significant obstacles to the upside until the 1.3115 area, which is the 50-day moving average and the area of the previous consolidation in early October.

In a more bullish scenario for the Pound, a full-blown corrective bounce could develop into the 1.3120-1.3180 area, but further gains will require more than a portfolio shake-up—a more global shift in sentiment is needed..

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Warren Takunda

Economic

At a glance, last month’s sharp drop in the headline inflation figure to 1.7% tells the Bank of England all it needs to know when it considers whether to cut interest rates next month.

The plunge from 2.2% in August puts the rate of prices growth well below the central bank’s 2% target and back in territory that we last saw in early 2021 – long before the Russian invasion of Ukraine sent energy prices rocketing.

Before the inflation figures were published, investors were 80% sure of a quarter of a percentage point cut to interest rates to 4.75% when policymakers meet next month.

Afterwards those odds tightened further to 90% and hopes are now growing that rates could fall more aggressively next year, as the Bank governor, Andrew Bailey, hinted to the Guardian earlier this month should inflation continue tumbling by more than expected.

The financial markets reacted accordingly to the prospect of a sharper downward trajectory. Sterling began to slide on currency markets as soon as the September inflation figure appeared, continuing a fall that has dragged the pound down from $1.34 late last month to almost $1.30.

Not so fast will be the message from many of the nine officials on the Bank’s rate-setting monetary policy committee (MPC). They will point out that the most recent fall in inflation relies on the tumbling oil price and how it feeds through to sectors such as transport.

The Office for National Statistics said the average price of petrol fell by 5.5 pence a litre between August and September 2024 to stand at 136.8p.

MPC members will be spooked that food prices are continuing to rise strongly when they would usually be affected by the falling cost of transport.

The main indicator of more persistent inflationary trends, the core inflation figure that strips out energy and food because they can be volatile, stood at a much higher rate of 3.2%.

Adding to the picture of an economy still struggling with rising prices, Tuesday’s jobs figures showed regular private sector pay growth – a measure closely watched by the Bank of England – eased only slightly from 5% to 4.8%.

Some MPC members will think that a rate of wages growth of more than twice the rate of inflation will force companies to keep prices higher for longer to maintain their profits.

This is a hawkish view and unlikely to be the one to prevail. Much more relevant is that all the measures of prices and wages are on the way down and indicate a weakening economic outlook – one that needs a boost from lower borrowing costs.

The oil price is dictated more these days by economic decisions in Beijing than conflict in the Middle East. And China, the world’s largest consumer of oil, is in the midst of a dramatic slowdown brought on by a housing bubble bursting in spectacular fashion.

Across the Atlantic, a boom in US economic growth is coming to an end. And the rest of Europe continues to labour under the twin pressures of the Ukraine war and lower demand from its chief export destinations – China and the US.

It is in this global context that the MPC will consider where next for interest rates. And one that adds to the likelihood they will now fall a bit faster than previously expected.

Source: TheGuardian

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Economic

Forex

In early October, the Bank of Japan (BOJ) held a regional meeting that highlighted positive trends in consumer spending, driven in part by wage growth, especially among younger demographics. This reflects a broader confidence within the BOJ, which had already revised its outlook on consumption at its September policy meeting. The central bank is considering the potential for policy adjustments, contingent on future data, as indicated by Deputy Governor Himino. He emphasized that any changes would depend on the economic outlook and would be evaluated on a meeting-by-meeting basis.

Prime Minister Ishiba recently commented that the current environment does not warrant additional interest rate hikes, a stance that has not yet altered the BOJ’s medium-term approach. On the government side, Minister of Economic Revitalization Ryosei Akazawa remarked that the current rate of 0.25% remains supportive, even factoring in rising inflation. This signals growing collaboration between the BOJ and the government on future monetary normalization efforts. Additionally, BOJ board member Seiji Adachi is expected to provide further insights on monetary policy at a forthcoming speech in mid-October. Market watchers are keenly observing Adachi’s remarks, given his past support for reflationary measures.

Despite the yen's recent stabilization, the currency’s trajectory remains uncertain. The yen has depreciated notably since the BOJ’s last meeting, and financial markets are sensing that the central bank's flexibility for further action may be narrowing. There is potential for increased expectations of additional interest rate hikes, particularly if upcoming comments from policymakers suggest a shift toward more aggressive tightening.

Meanwhile, in the U.S., economic data continues to surpass market expectations, with September's consumer price index (CPI) and employment figures both coming in stronger than anticipated. As a result, the likelihood of a rate cut by the Federal Reserve has diminished. While there is some concern over rising unemployment claims following recent natural disasters, the overall economic outlook remains robust. Market attention is focused on a speech by Federal Reserve Governor Christopher Waller, scheduled for mid-October, which will provide further clarity on the Fed’s stance ahead of the November policy meeting.

Additionally, the U.S. dollar has strengthened amid growing geopolitical tensions in the Middle East, although its upward momentum has been somewhat tempered when compared to other safe-haven currencies like the Swiss franc and the yen. As the U.S. presidential election draws nearer, polls suggest a possible lead for President Trump, which could have significant implications for U.S. monetary policy. A Trump victory may lead to higher long-term interest rates and further strengthen the dollar.

In terms of technical analysis, the USD/JPY exchange rate has approached a key threshold of 150, with potential to climb even higher if U.S. monetary policy takes a more hawkish turn. However, for the currency pair to surpass the 152-mark, additional hawkish surprises from the U.S. would likely be required.

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