💀 At death(-cross)'s door

Bitcoin's plunge continues, China's producer prices skyrocket, Refyne raises Series A and some more updates.

the mesha tribe

Jun 09, 2021

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Read Time: 930 words, 4:39 minutes.

There’s so much to cover today so let’s get started.

First up,

Market Snapshot 📈

Sensex: 51,941.64 (-0.64%) ↓

Nifty 50: 15,635.35 (-0.67%) ↓

Dow Jones: 34,599.82 (-0.088%) ↓

Nasdaq 100: 13,810.86 (+0.058%) ↑

Bitcoin: $34,669.27

Top Stories 📰

1. Bitcoin be tumblin' 📉

There seems to be no respite for our beloved Bitcoin.

The world's largest cryptocurrency dropped nearly 2% to $33,000, with some analysts saying that it's “dangerously approaching the $30,000 level.” The virtual currency has plummeted 10% this month alone, compared to its 45% slump since mid-April. The continuing downward spiral has led chart-watchers to sound alarms that the crypto could reach a bearish pattern known as the "death cross."

What's a death cross? It's a technical chart pattern that indicates a potential for a major sell-off. The death cross occurs when a short-term moving average crosses over a long-term moving average to the downside.

For Bitcoin, the recent slump has led its 50-day moving average to inch closer to its 200-day moving average. The last this happened was in November 2019, when Bitcoin dropped nearly 5% in one month.

But there's even a bigger crisis looming on the horizon. Some analyst said that if Bitcoin were to continue on its downward trajectory, it could reach $20,000!

How did we get here? The plunge comes in the backdrop of growing regulatory rhetoric from the US and China. Moreover, Tesla CEO Elon Musk's energy concerns and the growing number of ransom payments made using Bitcoin further fueled the downfall.

Why it matters? Despite such bearish outlooks, long term hodlers remain optimistic about Bitcoin's future. Proponents of cryptocurrencies like MicroStrategy CEO Michael Saylor boosted investor confidence by announcing plans to raise $500 million in junk bond sales to purchase more Bitcoin. Feeling bullish on crypto? Well then, let’s get started!

2. China's high on commodities 😵

The prices of commodities leaving China's factory in May has soared to their highest level since the 2008 global financial crisis, mounting speculation and hoarding concerns.

Producer price index — which measures price movements from the seller's point of view — advanced 9%, against Bloomberg's estimates of 8.5%. The index stood at 6.8% in April after spending the entirety of last year in negative territory.

Since January, the cost of raw materials rose sharply as demand for commodities reinforced China's industrial recovery. But rising prices have squeezed business margins, especially for producers directly selling their goods to consumers.

The growing prices have brought the attention of China's government, which warned against "excessive speculation" in commodity markets. It's now taking targeted actions to tackle soaring prices, monopolies, and misinformation.

Meanwhile, China's consumer price index — which measures price movements from buyer's point of view — has remained at 1.3% from a year ago. The increase was mainly driven by volatility in pork prices, prompting the government to boost its pork reserve.

Why this matters? For the past decade, commodities did not enjoy bull runs as much as stocks and bonds. But that changed when the pandemic hit, which sent commodities prices to new highs. Prices of soybeans, copper, and oil rose nearly 60% since March 2020. Additionally, rising inflation, weakening US dollar, and fiscal and green infrastructure further contributed to this newfound growth.

3. Today’s big deals 🎉

Fisker's unveils its moonshot goal for 2027
Fisker, a California-based EV startup that hasn't launched any vehicle so far, has announced ambitious plans to make its first-ever climate-neutral car by 2027. While the company hasn't released any project details, it aims to split the vehicle's lifecycle into five phases: upstream sourcing, manufacturing, logistics, use phase, and end-of-life. Fisker plans to make the vehicle without carbon offsets and will instead work with suppliers to create climate-neutral materials and production processes. The company is on track to start production for its all-electric Fisker Ocean SUV in November 2022, but it won't be climate neutral. Fisker, which first went public through a SPAC deal with Apollo Global, plans to bring four vehicles to market by 2025. Other automakers like Porsche and Polstar plan to go carbon-neutral by 2030.
Earned wage access startup raises Series A
Refyne, a Bangalore-based startup that offers wage access solutions to full-time and contractual workers in India, raised a $16 million Series A funding round from RTP Global and DST Global. The fundraising included participation from QED Investors, Jigsaw VC, and XYZ Capital, all of whom participated in a $4.1 million seed round in December. The company works alongside employers to provide workers with real-time access to their earned salaries to prevent them from taking payday loans or micro-credit schemes that carry predatory prices. So far, Refyne has over 100 companies as customers, including Cafe Coffee Day, Rebel Food, and Hira Group. It now plans to use the capital towards expanding its technology and accelerating its growth to serve 1 million workers in India this year.