Last week, BTC and ETH gained last week, trading near $27,250 and $1,900, up +2% and +4.3% from their level a week ago.
US Equities rose as well, with S&P and Nasdaq finishing the holiday-shortened trading week up +1.8% and +2% as markets welcomed the passing of the debt ceiling bill, thus averting a U.S. Default, and the strong job reports from Friday: Nonfarm payrolls growing much more than expected in May – 339,000 vs 190,000 expected, marking the 29th straight month of positive job growth.
Oil prices rose in the wake of the OPEC+ June meeting where Saudi Arabia announced an output cut of 1mm barrels a day to boost oil prices. The news had little impact on the WTI, trading near $71.8 on Friday, as worries of slowing demand in China due to weaker-than-expected economic data prevailed.
BTC and ETH are dropping today with both cryptos currently losing more than -4%, BTC piercing through $26,000 as the SEC announced it would sue Binance and its co-Founder for allegedly violating securities laws. US Equities are close to flat today as markets prepare for what should be a quieter week with Monday’s US factory numbers as well as Apple’s worldwide developer conference, Wednesday’s U.S. Trade Deficit data, and Thursday’s wholesale inventories data for April. As for the earnings season, a few companies are set to report this week – GameStop, and DocuSign among others.
CLIENT PROFIT
No changes were made last week. We kept our short positions on BTC and ETH, with our last short positions opening when BTC and ETH neared the $30,100 and $2,010 levels, which currently represent strong unrealized profits. The exposure to the market is still 12% of the AUM, the rest being in cash.
BTC
BTC gained last week, trading near $27,250, up +2% from its level a week ago. with Friday’s session making up for most of the losses incurred earlier in the week with the strong NFP job data.
Price action declined earlier last week to settle down near the $27,000 resistance throughout the week and over the weekend. However, BTC price plunged today amidst legal action by the SEC against Binance and its founder: BTC pierced below $26,000 and the lower band of our ascending parallel channel in the same way. It is currently trading near $25,500 with major supports near $25,000, $24,000, and $21,900 further below. As an indication, if BTC manages to break above the $28,700 mark, we may see its price heading toward $30,000 and above – which is unlikely in our opinion.
BTC’s 30-day Historical Volatility – HV- is still pretty much in line with last week’s level near 34%.
BTC ended the month of May down -7%. BTC’s performance for June is down -5.9%. with the YTD performance for 2023 being +55% – from +68% last week.
ETH
Like BTC, ETH gained last week, trading near $1,900, up +4.3% from its level a week ago. But the price is also falling sharply today with ETH trading close to the $1,800 mark with the next support near $1,500 further below. On the upside the $1,890 mark acts as the main resistance.
ETH ended the month of May down -0.1% and its MTD performance for June is currently -3.6%, with the YTD performance being +51% – from +59% as of last week.
OTHER MARKETS
US Equities rose as well, with S&P and Nasdaq finishing the holiday-shortened trading week up +1.8% and +2% as markets welcomed the passing of the debt ceiling bill, thus averting a U.S. Default, and the strong job reports from Friday: Nonfarm payrolls growing much more than expected in May – 339,000 vs 190,000 expected, marking the 29th straight month of positive job growth.
S&P and Nasdaq’s performance for May is +0.2% and +5.8% respectively. S&P and Nasdaq’s MTD performances for June are currently +2.2% and +2.3% and the YTD performances are +11% and +26% respectively.
DXY
DXY remained steady over the week near its 104 level with Friday’s session making up for most of the losses incurred earlier in the week after the strong NFP job data gave additional arguments for further strengthening from the Fed. Markets currently pricing in a 23% chance of a 25-basis point hike during the next FOMC meeting, according to CME’s FedWatchTool.
The index is currently flat, trading near 104, confirming above its 103.5 nearest support and our upward-sloping trendline near 103.2 currently, and major support near 101 further below. On the upside, the 105.6 mark acts as major resistance –where the 200 MA is.
US TREASURIES
US Treasuries declined over the week despite last week’s hotter-than-expected job data. The yields on the 10-year and 2-year Treasuries were trading near 3.70% to 4.51% on Friday, down from 3.81% and 4.57% the week before.
The 10Y yield and the policy-sensitive 2Y are currently flattish, exchanging near 3.69% and 4.47% from 3.69% and 4.46% last Monday, extending the inversion of the yield curve to 78bps – 77 bps last week.