CFT Update Monday, October 24th, 2022.
BTC and ETH have been trading in a tight range this past week between $19,700 and $18,600 and close to the $1,300 level respectively, ending last week close to flat.
Among the macro turmoil, the political reshuffle in the UK and the earnings season in full swing, crypto markets have held relatively well this past week, limiting losses on the week to -0.07% for BTC and up 0.2% for ETH.
Equity markets were declining slightly early last week but rallied during Friday’s session, ending in the week with gains close to and over 5% for S&P and Nasdaq respectively as markets started weighing the possibility that Fed could slow its monetary tightening as early as 2023 with comments from WSJ Fedwatcher Nick Timiraos and St Louis Fed’s president James Bullard.
This week, investors will face a busier week with major earnings releases – among others all FAAMG – and a batch of economic data with Q3 US GDP estimation along with additional housing market data –September home prices and pending home sales. The release of the Consumer Confidence Index for October and PCE data for September will also give further readings on the state of the economy in anticipation of the next Fed meeting in early November. In Europe, markets will keep an eye on the ECB’s rate decision on Thursday and the situation in the UK.
BTC and ETH are losing ground today, trading near the $ 19,300 and $ 1,330 mark respectively, whereas US main Equity Markets are prolonging the positive momentum from last Friday. DXY is trading with a slightly positive bias above 112.
Client Profits
No changes were made this past week to the portfolio. We still have our exposure to the market to 41%, the rest is in cash.
The short-term view remains the same as last week: should BTC test the $17,500 level, we could consider adding funds to our existing long positions in BTC and Alts as we have 59% of the AUM in cash.
If ETH declines further towards the $ 1,000, we could consider a trade.
BTC
BTC had a relatively stable week with price action characterized by low volatility, oscillating between $ 18,600 and $ 20,000 in the absence of a major driver ending the week almost flat with -0.07%.
BTC gained over the weekend towards $19,700 but pulled back today and is now trading around 19,300, recovering most of October’s losses with a performance for the month of – 0.04%.
The prospects are still bearish in the medium term but recent talks of a slowdown or pivot from the Fed could fuel some momentum in the short term. In the upside, $ 22,500 and $ 25,000 still act as resistances. On the downside, $17,500 acts as support and then the next support would be $13,000.
ETH
ETH traded in a similar fashion to BTC, oscillating around $ 1,300 over the course of last week ending the week +0.2%. It was gaining over the weekend towards $ 1,400 before pulling back and now settling around $1,330. The MTD performance is now +1.43%.
Like BTC, we believe ETH to still be on a bearish trend in the medium term given the still strong inflation and US job market prospects.
If price action confirms below the $ 1,250 mark and declines towards the $ 1,000 mark, we could enter a swing trade – with the next support being the lowest of the year – $900 level.
Other markets
Traditional US Equity Markets ended the week positively, with S&P and Nasdaq COMP printing gains of 4.7% and 5.2% respectively fuelled by positive news coming from Q3 earnings and the possibility of a slowdown in the rate hikes, which prevailed on the political turmoil happening in the UK and still hot inflation numbers.
Today, US Equities are prolonging the bullish move while investors await further earnings releases and keep an eye on Thursday’s ECB meeting and the UK situation.
DXY
DXY had been trading around the 112 mark this past week, ending a 2 – week streak of positive weekly gains with mild losses for the week on Friday of -1%. The recent high of 114.78 still acts as a resistance while the downside support being at 110.
Dovish signs of a slowdown around the Fed combined with signs of a currency intervention by Japanese authorities to stabilize the Yen under pressure were the drivers of price action.
DXY
US Treasuries
Recent inflation hurdles kept propelling yields, reaching a multi-year high. The 10Y yield broke and confirmed its rally above the 4%, but now settling near 4.22% on recent Fed pivot bets.
Thank you!
CFT Team.