BTC and ETH lost some ground last week, with BTC declining by nearly -2.5% over the week, marking its second consecutive week of losses, while ETH dropped by around -7.8% on Friday. Both cryptocurrencies struggled to sustain their mid-October rally amid global regulatory uncertainty and significant transfers of Bitcoin reserves to exchanges ahead of the U.S. election on Nov. 5. Despite the setback, BTC continued to assert its dominance, reaching a 3-year high in market dominance at over 59% – a level last seen in March 2021. BTC traded around $66,590 on Friday, while ETH hovered near $2,440. Year-to-date, BTC has gained +63%, with ETH up 9%, while month-to-date (MTD) performances in October stand at +8.7% for BTC and – 3.4% for ETH. Meanwhile, digital asset investment products experienced a net inflow of $901 million, bringing total year-to-date inflows to $27 billion, as per CoinShares’ Digital Asset Fund Flows report.
US equities closed the week mixed, with the Nasdaq securing a seventh consecutive week of gains and reaching a new record high of $18,690, while the S&P 500 edged moderately lower, buoyed by improved consumer sentiment, a solid global October PMI reading of 55.3, and strong tech earnings, notably from Tesla. The S&P 500 and Nasdaq ended the week near 5,808 and 18,518, respectively, posting +0.2% and -1.0%. Meanwhile, the VIX index settled around 20.
U.S. Treasury yields continued their ascent last week, with the 10-year yield reaching a 3-month high of 4.26% and the 2-year yield hitting 4.11%. The 10-year yield eventually closed at 4.24%, while the 2-year yield settled near 4.11%. Treasury yields have risen by about 60 basis points since the Federal Reserve eased monetary policy at the September FOMC meeting, which could be attributed to the stronger-than-expected economic data– rising NFP job data in September of 254,000 and inflation cooling down to 4.1%. Market expectations for a November rate cut have significantly increased, with the CME FedWatch Tool indicating a 97% probability of a 25-basis point cut, which would set the target range to 4.50-4.75%.
The DXY index advanced last week, closing Friday near 104.31, after reaching a high of 104.57—its highest level since July 2024. Currently, the index is hovering around 104.2, above its 100-day and 200-day moving averages, which provide support at 103.8 and 103.2, respectively. On the upside, the 105.5 level represents the next resistance, aligning with the 38.2% Fibonacci retracement level.
Oil prices edged higher last week, with WTI closing at $71.62, after a volatile week driven by concerns over potential conflict escalation in the Middle East that could disrupt supply, offset by a generally pessimistic demand outlook weighing on prices. However, prices are dipping today, with the WTI down approximately 5.5% amid hopes of de-escalation in the Middle East following Israel’s decision to refrain from attacking Iran’s refining facilities, easing global supply concerns.
BTC and ETH are trading higher today, with BTC hovering near $69,500 while US Equities have started this week with small gains in anticipation of a busy calendar lying ahead starting with Tuesday JOLTS job numbers followed by this Thursday’s reports on PCE inflation – Headline and Core expected at +2.1% and +2.6% yearly – and the third-quarter GDP expected at +3.1%, coming along with housing and manufacturing data followed by this Friday’s NFP job report, which will set the tone ahead of the upcoming FOMC rate meeting and the US elections next week. In addition, investors will also be looking forward to the batch of corporate earnings reports, with Alphabet, Apple Microsoft, Meta, Exxon, and Eli Lilly set to report this week among many others.
Client Profits
Over this month, we rebalanced the portfolio by taking profits on most of our positions and opening long positions on some Altcoins DOT, ADA, and MKR while opening short positions on other Altcoins – SUI, TRX and AAVE.
Currently, 24% of our assets under management (AUM) are market-exposed, with the remainder held in cash to manage risk effectively as we approach a pivotal week. Volatility may rise leading up to the U.S. elections and the FOMC meeting next week.
As previously noted, Bitcoin’s medium-term trajectory appears closely linked to monetary policy decisions and the outcome of the U.S. presidential election in November 2024, potentially introducing new initiatives and regulations.
We anticipate BTC could benefit from a more accommodative financial environment, with a 25-bps rate cut expected next week. However, this momentum may be offset by the bearish divergence discussed in this report and potential institutional selloff pressure as some investors seek to lock in profits.
BTC
BTC lost some ground last week, declining by nearly -2.5% and marking its second consecutive week of losses. The cryptocurrency struggled to sustain its mid-October rally amid global regulatory uncertainty and significant transfers of Bitcoin reserves to exchanges ahead of the U.S. election on Nov. 5, factors that have weighed on prices.
Despite the setback, BTC continued to assert its dominance, reaching a 3-year high in market dominance at over 59%. BTC traded at around $66,590 on Friday. As for Year-to-date, BTC has gained +63%, while the MTD performance in October stood at +8.7%. Meanwhile, digital asset investment products experienced a net inflow of $901 million, bringing total year-to-date inflows to $27 billion, as per CoinShares’ Digital Asset Fund Flows report.
On the daily chart, BTC experienced a rebound near its $60,500 pivot line on Oct 11 and steadily moved upward to reclaim the $69,000 last week. While the price is currently testing the $70,000 resistance and its Nov 2021 High, we can notice the formation of a bearish divergence on the weekly timeframe: the price achieved a new high, but the RSI failed to confirm the high and formed a lower high. This bearish signal could potentially trigger a move to the downside in the coming weeks, which could see BTC revisit the $50,000 zone possibly.
After rounding up 2023 performance to +155%, BTC’s 2024 YTD performance is currently at +63 %, while the MTD for October stands at +8.9%.
ETH
ETH dipped last week, losing -7.8% by Friday. Like BTC, the cryptocurrency struggled to sustain its mid-October rally and had to settle near $2,440. Year-to-date, ETH is up +9%, while the month-to-date (MTD) performance in October stands at -3.4%.
The outlook on ETH remains bearish in our opinion as the cryptocurrency lacks momentum to confirm above the $2,500 zone and is currently confined to a range between $2,200 and $2,800. Price has been consolidating sideways after its down move from early August and has many times had to find support along its ascending trendline. A break below this trendline, currently near $2,380 could send the price down to the $2,000 zone. On the upside, the $2,800 mark serves as the nearest resistance.
After rounding up 2023 performance to +155%, ETH’s 2024 YTD performance is currently at +9%, while the MTD for October stands at -3.4%.
Other marketsÂ
US equities closed the week mixed, with the Nasdaq securing a seventh consecutive week of gains and reaching a new record high of $18,690, while the S&P 500 edged moderately lower, buoyed by improved consumer sentiment, a solid global October PMI reading of 55.3, and strong tech earnings, notably from Tesla. The S&P 500 and Nasdaq ended the week near 5,808 and 18,518, respectively, posting +0.2% and -1.0%. Meanwhile, the VIX index settled around 20.
On the daily chart, the S&P price is currently trading with a negative short-term bias below the wedge pattern. We could potentially see a push to the long-awaited 6,000 mark before seeing a pullback. As for the Nasdaq, price is evolving within a wedge pattern that will be crucial to monitor going into tech-oriented earnings this week.
After ending 2023 up +17% and +29.6%, S&P and Nasdaq’s MTD performances for October are currently +0.8% and +1.8% with YTD performances standing at +22% and +23%.
DXY
The DXY index advanced last week, closing Friday near 104.31, after reaching a high of 104.57—its highest level since July 2024. Currently, the index is hovering around 104.2, above its 100-day and 200-day moving averages, which provide support at 103.8 and 103.2, respectively. On the upside, the 105.5 level represents the next resistance, aligning with the 38.2% Fibonacci retracement level.
Our outlook for DXY remains bearish for the remainder of the year as we expect bearish pressure to prevail as more rate cuts are likely later this year although the goldilocks scenario of a no landing of the US economy could strengthen the Dollar and offset the downward pressure.
US Treasuries
U.S. Treasury yields continued their ascent last week, with the 10-year yield reaching a 3-month high of 4.26% and the 2-year yield hitting 4.11%. The 10-year yield eventually closed at 4.24%, while the 2-year yield settled near 4.11%. Treasury yields have risen by about 60 basis points since the Federal Reserve eased monetary policy at the September FOMC meeting, which could be attributed to the stronger-than-expected economic data– rising NFP job data in September of 254,000 and inflation cooling down to 4.1%. Market expectations for a November rate cut have significantly increased, with the CME FedWatch Tool indicating a 97% probability of a 25-basis point cut, which would set the target range to 4.50-4.75%.
The 10Y is currently trading near 4.28% while the 2Y yield is evolving near 4.13%, confirming the end of the yield curve inversion.
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