Monday, October 3rd, 2022:
BTC and ETH have been trading sideways around the 19,000 mark and 1,300 mark, respectively
this past week whereas Equities extended their decline further as new inflation data – August PCE index – came out higher than expected, keeping markets nervous about the potential impact of further monetary tightening as central banks reiterated their intention to contain inflation.
This week, investors will have an eye on Friday’s US jobs data to better assess the strength of the US economy and adjust their expectations towards the Fed’s policy.
BTC and ETH are advancing today and outperforming US main Equity Markets, also regaining, whereas DXY is trading moderately bearish, below the 112 level.
Following XRP’s last week rally that saw price reach 0.55, price action has been trading downward, hitting a low of 0.41 since but XRP is rebounding today and trading around 0.45.
Client Profits:
We opened a position on SOL this week, bringing our portfolio exposure to the market to 34%, the rest being in cash. We maintained our positions in BTC and a few large-cap coins.
In the short term, should BTC test the 17,500 levels, we could consider adding funds to our existing long positions in BTC and Alts as we still have 66% of the AUM in cash.
We are also keeping an eye on ETH price action as we could consider a trade if ETH breaks below the 1,200 level.
BTC:
BTC has been trading in a narrow range between 19,000 and 19,500 and is regaining from last week. After closing September with a negative performance of -3.16% over month, BTC is now regaining this week and trading near the 19,300 level.
The trend is still bearish as strong inflation data keep fuelling concerns for further rate hikes.
The probability for price action to re-capture the upward channel is still very low.
ETH:
Like BTC, ETH traded sideways and relatively flat this past week, ending the month of September with a monthly performance of -14.5%. Last week price action saw ETH trading near the $1,300 mark before retracing in the latter part of the week towards the $1,250 mark as PCE index came out higher in August, rising 4.9% on a year-over-year basis.
As mentioned last week, we believe ETH could continue on this bearish trend, given the gloomy inflation prospects. The next support could be the 1,250 mark – which, if we pierce below, we could enter a swing trade- and then the next support would be the lowest of the year– $900 level.
Other markets:
Equities prolonged their decline over last week, with S&P 500 and Nasdaq COMP losing -2.9% and -3% for the week on Friday. Today, Equities are regaining slightly for the first session of the month, in the absence of strong driver.
DXY
DXY soared last week, crossing above the upward parallel channel and the 114 mark before reversing sharply after. The 114.8-high level could act as a resistance for the coming weeks.
If price action breaks above this level, the next level could be 120.
On the downside, the 110- high level from September still acts as support.
From a fundamental perspective, DXY retraced as fears around the GBP dissipated slightly as the Bank of England announced a temporary bond-buying program.
US Treasuries:
After breaking above the upsloping resistance last week, the 10Y US Treasury bond yield retraced below and is now trading around 3.60%. The high of 4.019% could now act as resistance for price action.
Thank you!
CFT Team.