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Gate.io Blog Daily Flash | US National Debt Hit Record $31 Trillion Striking Worry For Broader Markets, BSC Saw $100M Exploit

Daily Flash | US National Debt Hit Record $31 Trillion Striking Worry For Broader Markets, BSC Saw $100M Exploit

07 October 11:47

Fundamental and Technical Outlook

👓 Macro

According to the latest figures from the U.S. Treasury Department, USA’s national debt has topped $31 trillion for the first time.

The record debt-to-GDP ratio was last seen in the aftermath of World War II, leaving the nation with a debt burden so large that it would need to spend an amount larger than the entire annual economy in order to pay it off (the debt-to-GDP percentage totaled 121% in Q2).

The record amount is adding to worries about the economic health of the country, which is grappling with red-hot inflation and a higher interest rate environment.

Meanwhile, the job report today will be highly anticipated for broader markets, as it will be the last report before the Nov. 2 FOMC meeting.

The jobs report will indicate if the Federal Reserve is heading in the right direction with its recent hawkish rate hikes.

Given the forecast of 260,000 new jobs in September and an unemployment rate of 3.7%, there is a solid chance the data comes in hotter than expected, which would bring much volatility to the markets.

The DJIA (-1.15%), S&P 500 (-1.02%), and Nasdaq (-0.68%) all traded lower Thursday after seeing a halt in bullish momentum Wednesday.

Bitcoin (BTC) was trading at $20,009 (-1.64%) and Ether (ETH) was changing hands at $1,357 (-1.16%) as of this writing. BNB (BNB) -3.65%, Dogecoin (DOGE) -3.57%, and Terra Luna Classic (LUNC) -4.06%.

🟠 BTC Weekly Timeframe

As of Oct. 7 Asian session, Bitcoin (BTC) was still trading above the monthly level of 19,858, although the week’s ascension had slowed down since Oct. 6, most likely due to anticipation for Friday’s U.S. jobs report.

Looking ahead in the coming weeks, key resistance and support zones have been measured from various Fibonacci extension levels.

BTC Weekly Support zones

  1. 17,974 - 17,167
  2. 16,880 - 16,221

BTC Weekly Resistance zones

  1. 20,907 - 21,569
  2. 22,490 - 23,290

Daily Timeframe

As of this writing on Oct. 7 02:32 UTC, BTC was trading at $20,016 (-1.64%) in a 24hr period.

On Thursday, BTC closed below the 23.6% (20,098) Fibonacci Retracement level and found support at the edge of the current resistance zone (19,967 - 20,374).

As the broader markets will be anticipating Friday’s U.S. jobs report to gauge the progress of the Federal Reserve’s rate hikes, volatility should be expected during the American trading session.

BTC Daily Resistance zones

  1. 19,967 - 20,374
  2. 20,868 - 21,385

BTC Daily Support Zones

  1. 19,876 - 19,699
  2. 19,699 - 19,523

🔵 ETH Weekly Timeframe

As of Oct. 7, Ether (ETH) is showing strength within the two weekly support trendlines. Notably, ETH is hovering around the 23.6% (1,361) Fibonacci Retracement level measured from the last 3 weeks’ slump.

ETH Weekly Support zones

  1. 1,264 - 1,180
  2. 1,180 - 1,108
  3. 1,108 - 1,033

ETH Weekly Resistance zones

  1. 1,361 - 1,433
  2. 1,433 - 1,558

Daily Timeframe

As of this writing on Oct. 7 02:43 UTC, ETH was trading at $1,358 (-1.2%) in a 24hr period.

Yesterday, we saw the price of ETH close below the 23.6% (1,361) Fibonacci level and the current resistance zone (1,356 - 1,378). This is an indication of short-term uncertainty, perhaps due to Friday’s expected U.S. jobs report and its implied volatility.

However, ETH made a ‘higher wave’ on Oct. 4 which establishes short-term bullishness, and so far the price of ETH is still on the same trajectory unless the bears manage to bring the price below the yellow support zone (1,333 - 1,322) which would invalidate said wave.

ETH Daily Resistance zones

  1. 1,356 - 1,378
  2. 1,399 - 1,436

ETH Daily Support zones

  1. 1,340 - 1,333
  2. 1,333 - 1,322
  3. 1,303 - 1,286

📌 The topic of the Day:

Stablecoins Lost $38 Billion In Circulation Since May

The collapse of the algorithmic stablecoin Terra USD has dampened confidence in the stablecoin sector.

According to DefiLlama, the circulation of stablecoins has decreased by approximately $38 billion since early May. There are still $148.7 billion left in circulation, with the majority consisting of USDT ($68.2B), USDC ($46.7B), BUSD ($21.4B), DAI ($6.33B), and FRAX ($1.33B).

The crumbling of USTC in May accounted for nearly 50% of the $38 billion stablecoin circulation plunge. Another stablecoin, Acala USD (aUSD), lost its peg in August after a protocol exploit caused 3.022 billion aUSD to be minted erroneously.

In terms of regulation, Stablecoins also face an uncertain future with a draft bill in the U.S. House of Representatives proposing to ban algorithmic stablecoins for two years.

With most major world governments pushing for their own CBDC agendas, it’d be interesting to see how the stablecoin sector will innovate to bring confidence back on the table.

🗒 Happenings of The Week (Oct. 01 - 07):

  • 🔹$100 million worth of BNB tokens were transferred from the BSC token hub to a new address. Binance CEO Changpeng Zhao confirmed the occurrence of a cross-chain bridge exploit on Friday. Binance said it would halt deposits and withdrawals via the BNB Smart Chain. According to blockchain developer @0xfoobar, this hack is similar to the recent Ronin and Harmony Cross-Chain Horizon Bridge exploits.

  • 🔹The European Council passes MiCA, EU’s comprehensive crypto regulation. MiCA includes a 12-18 month adaptation period to prepare for the new laws set in place. The legislation will need to pass through an additional vote in the European Parliament next week.

  • 🔹The European Union’s eighth sanctions package against Russia bans all crypto services to Russian entities, including Russian wallets holding €10,000 or less. The new sanctions also include import bans totaling up to €7 billion in an attempt to restrain the war.

  • 🔹EU policymakers voted in favor of a resolution to use blockchain technology to modernize taxation processes in the European Union. The resolution tries to identify what makes a taxable event and suggests that the conversion from crypto to fiat currency is the most viable option.

  • 🔹Senior U.S. regulators propose new legislation and increased rules around digital assets. The report identifies three primary regulatory gaps in the U.S. for digital assets, and 10 total recommendations for policymakers and regulators to address them. The report also calls for bank regulators to be more proactive in existing authority to supervise and examine digital asset firms.

  • 🔹Musk renews bid at $54.20 per share for Twitter as he looks to avoid trial, although Twitter has yet to formally accept that renewed offer**.** The social media company sued Musk in July for backing out of the agreement to buy Twitter for $44 billion. Apollo Global Management has backed out from the financing deal that Musk proposed.

  • 🔹Hedge fund titan Ray Dalio steps down as co-CIO of Bridgewater Associates, officially giving up control of the firm and its $150 billion in assets. Known for pioneering strategies like risk parity and its funds Pure Alpha and All Weather, Bridgewater delivered strong returns throughout various cycles for 40 years.

  • 🔹Fidelity reveals Ethereum index fund with $5,000,000 in sales in a new filing with the SEC. In 2020, Fidelity launched a Bitcoin index fund that surpassed $125 million in investments in May.

  • 🔹Crypto asset management firm Grayscale is launching Grayscale Digital Infrastructure Opportunities focused on Bitcoin mining hardware which the firm said is designed to capture the upside of crypto winter. Digital asset mining and staking infrastructure firm Foundry will manage day-to-day operations. Both firms are subsidiaries of the Digital Currency Group (DCG).

  • 🔹MakerDAO, the issuer of the stablecoin DAI, has partnered with DeFi asset advisor Monetalis to initiate a $500 million investment in traditional assets using its reserves. The DAO community approved a $1 million pilot transaction Wednesday. MakerDAO aims to invest 80% into short-term US treasury bonds and 20% into corporate bonds.

  • 🔹Hugo Boss has teamed up with the NFT collection Imaginary Ones to launch a “360-degree metaverse experience.” Hugo said 500 spots will be allocated to customers who purchase a limited edition "phygital" t-shirt that contains a QR code, from which users will be directed to a Snapchat lens to create a special augmented-reality effect.

  • 🔹Reality TV star Kim Kardashian was charged by SEC for unlawfully promoting EthereumMax (EMAX). EMAX spiked 126% after the announcement. The star has agreed to pay $1.26 million in penalties to the SEC.

  • 🔹Sushi DAO votes Jared Grey as the new 'Head Chef'. Grey is a former IT consultant and CEO of DeFi yield platform Eons Finance.

  • 🔹Flashbots now account for 39% of Ethereum blocks as censorship concerns rise. Flashbots is a widely used service because it offers blocks that provide more value to validators. Some in the Ethereum community are calling on Flashbots to shut down its main relayer.

  • 🔹U.S. Treasury bills now account for 58.1% of Tether's reserves, up from 43.5% in June. The stablecoin issuer has said that it would continue to reduce its commercial paper holdings and improve the quality of its reserves.

  • 🔹This week’s fundraising activities include but are not limited to:

    • Tech investment giant Tiger Global Management is raising $6 billion for a new tech investment fund. The firm has invested in more than three dozen crypto and blockchain startups since 2020, including NEAR Protocol and Lysto.
    • Web3 gaming studio Horizon Blockchain Games’ $40 million Series A led by Brevan Howard Digital and Morgan Creek Digital with participation from ****Ubisoft Entertainment SA and Take-Two Interactive Software.
    • Crypto protocol Golden raises $40 million in a Series B led by a16z. The protocol is building a platform that centralizes data using technologies and mechanics from Web3.
    • Crypto checking account provider Juno raises $18 million and launches tokens for its tokenized loyalty program. Juno says its checking accounts are free and insured by the Federal Deposit Insurance Corporation (FDIC).
    • Web3 hospitality platform Blackbird has raised $11 million in a seed round. Founder Ben Leventhal previously co-founded two startups that have shaped the restaurant industry: the food publication Eater and the restaurant discovery platform Resy.
    • Investment-focused crypto startup Xalts raised $6 million co-led by Citi Ventures and startup incubator Accel. Xalts is building investment products to remove barriers that inhibit institutions from accessing the digital asset class.
    • Coolkicks sneaker chain has raised $6 million for the collectible trading platform MynaSwap built on the Avalanche network. Investors include the Avalanche ecosystem fund Blizzard and NFL superstars Odell Beckham Jr. and Kyler Murray.

Author: Gate.io Researcher Peter L.
This article represents only the researcher's views and does not constitute any investment advice.
Gate.io reserves all rights to this article. Reposting the article will be permitted provided Gate.io is referenced.
In all other cases, legal action will be taken due to copyright infringement.

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