Weekly Market Update - Bitcoin Forms Golden Cross, Altcoins Surge, Fed Holds Rates, and SBF Found Guilty On All Counts

Takeaways

• Bitcoin holds on to gains as a golden cross appears: Bitcoin (BTC) consolidated around $35k USD this week after its price action exhibited a “golden cross” on the daily BTC chart. Market observers have suggested that such price action could portend a continued upward trajectory for the leading crypto.
• Sam Bankman-Fried found guilty on all counts: Sam Bankman-Fried, the founder and former CEO of FTX, was found guilty on all seven counts leveled against him. He faces up to over 100 years in prison. The sentencing hearing is tentatively set for March 28, 2024. In closing arguments this week, prosecutors argued that SBF built his FTX empire on a “foundation of lies and false promises” describing him squarely as a liar who fabricated a “pyramid of deceit.” The defense sought to convince the jury that SBF had simply made mistakes that culminated in the collapse of his once $32 billion empire.
• Solana leads altcoin charge as ether lags: Altcoins performed well this week, with Solana (SOL) a notable outperformer, rallying ~24%. Research analysts have pointed to SOL’s high throughput and growing developer activity as fundamental catalysts for the rally. Other notable high-performers include Decentraland (MANA) +16%, Uniswap (UNI) +13%, Cardano (ADA) +11%, Polkadot (DOT) +11% and Ripple (XRP) +11%. Ether (ETH) prices did not follow suit gaining around 1.7% this week.
• Federal Reserve holds rates steady and yields continue to dip: The Federal Reserve held its target interest range between 5.25%-5.5% this week. The Fed did not rule out the possibility of future interest hikes depending on economic data, but most analysts do not expect any additional hikes this year. Treasury yields continued their decline, with the 10-year treasury yield dropping 12 basis points after the Fed meeting.

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Bitcoin Consolidates After Hitting Golden Cross

Bitcoin (BTC) consolidated around $35k USD this week, continuing to hold on to gains after last week’s rally. The October rally pushed the price action of BTC to exhibit a “golden cross” on the daily BTC chart, a widely used technical indicator where the 50 day-moving-average exceeds the 200 day-moving average. Market observers have suggested that such price action could portend a continued upward trajectory for the leading crypto.

Bitcoin continues to lead crypto amidst the SEC’s ongoing review of the spot bitcoin ETF applications with bitcoin dominance, further extending its rally to 54% this week.

Sam Bankman-Fried Convicted On All Seven Counts of Fraud

Sam Bankman-Fried, the founder and former CEO of FTX, was found guilty on all seven counts he faced. After deliberations started on Thursday afternoon, the jury swiftly handed down its verdict a couple hours later on Thursday evening, ending the four-week trial. SBF faces up to over 100 years in prison. His sentencing hearing is tentatively set for March 28, 2024.

In closing arguments this week, prosecutors argued that SBF built his FTX empire on a “foundation of lies and false promises” describing him squarely as a liar who fabricated a “pyramid of deceit,” conspiring to steal $8 billion of FTX users’ funds. The prosecution focused on contradicting, ambiguous, and non-committal answers from SBF with quotes from past interviews or social media posts.

In contrast, the defense sought to convince the jury that SBF had simply made mistakes that culminated in the collapse of his once $32 billion empire. They argued that he had conducted himself “in good faith,” without committing crimes or asking associates to commit any.

Altcoins Push Higher With Solana Leading the Charge

Altcoins have also experienced a resurgence in the past week. Solana (SOL) was a notable outperformer, rallying ~24% this week. Research analysts have pointed to SOL’s high throughput and continued growing developer activity as fundamental catalysts for the token’s rally since the FTX fallout. Other notable large cap altcoin performers include Decentraland (MANA) +16%, Uniswap (UNI) +13%, Cardano (ADA) +11%, Polkadot (DOT) +11% and Ripple (XRP) +11%.

Notably absent from that list is ether (ETH), which has gained 1.7% since last week. The ETH/BTC pair hit its lowest level since May 2021, ~0.05.

Federal Reserve Keeps Rates Steady as Growth Improves; Treasury Yields Decline

The Federal Reserve held its target interest range between 5.25%-5.5% at Wednesday’s Federal Open Market Committee (FOMC) meeting, as expected. The Fed did not rule out the possibility of future interest hikes depending on economic data. Most analysts have ruled out any additional hikes for the year’s last FOMC in December. The move comes as inflation remains relatively stubborn at 3.7% as of September 30, well above the Fed’s 2% target.

Economic growth has been strong of late, with third-quarter gross domestic product (GDP) topping expectations at 4.9%, and September employment growth surpassing expectations. Following the meeting, the Fed strengthened a statement on economic growth to say that “economic activity expanded at a strong pace in the third quarter,” having previously used the phrase “solid pace.”

October job growth released Friday showed a notable slowdown in hiring with 150,000 new jobs created, which was below expectations. Market observers suggested the Fed would welcome the report.

Treasury yields continued their decline, with the 10-year treasury yield dropping 12 basis points on Wednesday after FOMC to 4.674% after topping 5% last month. Yields fell even further following Friday's jobs report.

Crypto and traditional markets reacted favorably to the Fed's decision to the keep rates steady. BTC rose past $35.5k following the news, the S&P 500 rose just over 1% on Wednesday, and the Nasdaq ended the day up over 1.5%.

-From the Gemini Trading Desk