BTC and ETH wrapped up the past week in mixed order. While BTC extended its rally to three consecutive weekly gains and reconnected with the $69,000, ETH experienced a decline triggered by whale selloff profit-takings despite the launch of Spot ETH ETFs on July 23. On Friday, BTC and ETH were trading near $67,915 and $3,275, respectively, with BTC up + 1.8% and ETH down -6.6% over the week, bringing their year-to-date performances to +60.1% and +43.5%. As for the month to date, BTC and ETH are set to close out July in mixed order with BTC currently up +8% while ETH is down -5%. Meanwhile, digital asset investment products experienced a relatively quiet US$245m of inflows, despite a strong ETF launch overshadowed by incumbent outflows, bringing the year-to-date total to $20.5 billion, according to CoinShares’ report ‘Digital Asset Fund Flows’.
The S&P and Nasdaq lost ground this past week as markets digested a tough week for tech stocks, particularly TSLA and GOOG. Meanwhile, signs of a sectoral rotation emerged, with the Dow and Russell 2000 benefiting from an influx of funds into small-caps amidst hopes of economic resilience and easing PCE inflation at 2.5%, in line with expectations.
The S&P and Nasdaq closed lower for the week, near 5,459 and 17,357 respectively, shedding -0.8% and -2.1%. Meanwhile, the VIX index moved higher to 16.9. Several factors may drive the market this coming week, including a heavy batch of corporate earnings, the FOMC meeting, and the July NFP employment report.
US Treasury yields dropped last week after the Federal Reserve’s preferred inflation gauge, the PCE data, met expectations of +2.5% year-over-year. The yield on the 10-year note closed lower at 4.19%, while the 2-year note dropped to near 4.39%, shrinking the inversion of the curve to only 20 basis points. While no rate cuts are expected at this week’s FOMC meeting, any updates on a possible September cut could move markets. According to the CME FedWatch Tool, the odds of a 25-basis point rate cut in September increased to 87% from 57% a month ago.
DXY remained steady, hovering below the 104.5 mark last week. The index faced mixed signals as US PCE inflation steadied, while US economic data remained robust. Q2 GDP exceeded expectations at +2.8%, and the Composite PMI rose to 55.0 from 54.8, reaching its highest level since April 2022.
Oil prices decreased last week, posting their third consecutive weekly decline. This followed the surprise rate cut by China aimed at sustaining its economy, raising concerns over both China’s and the global demand outlook. WTI reached a six-week low of $76.07 before closing near $76.41 on Friday.
BTC and ETH are trading in mixed order today, with BTC retracing down to $65,800 after testing the $70,000 resistance this Monday, while ETH is edging higher near $3,280 as markets look ahead to this week’s major schedule where Wednesday’s FOMC rate meeting and this Friday Non-Farm Payroll employment report for July – +190,000 expected – are set to take center stage this week. Finally, this week will also include major Mega cap earnings as Microsoft, Meta Platforms, Amazon and Apple are set to report throughout the week.
Client Profits
We consistently executed our trading strategy, capitalizing on price movements and outperforming the Altcoins market. Since March, the Alts market has lost significant value, and prices remain very low. Notably, large-cap alts such as AVAX, INJ, and ADA, to name a few, have experienced significant declines.
While we progressively took profits on some of our existing long positions on some large-cap coins, we are monitoring the remainder of these long positions as we believe some more upside potential can be found. We also initiated some short positions on BTC and ETH following the recent pump on BTC.
Currently, our market exposure stands at 40% of AUM, with the remainder held in cash. We anticipate volatility this week due to the latest FOMC meeting, key corporate earnings and employment data.
BTC
BTC and ETH wrapped up the past week in mixed order. While BTC extended its rally to three consecutive weekly gains and reconnected with the $69,000, ETH experienced a decline triggered by whale selloff profit-takings despite the launch of Spot ETH ETFs on July 23. On Friday, BTC and ETH were trading near $67,915 and $3,275, respectively, with BTC up + 1.8% and ETH down -6.6% over the week, bringing their year-to-date performances to +60.1% and +43.5%. As for the month to date, BTC and ETH are set to close out July in mixed order with BTC currently up +8% while ETH is down -5%. Meanwhile, digital asset investment products experienced a relatively quiet US$245m of inflows, despite a strong ETF launch overshadowed by incumbent outflows, bringing the year-to-date total to $20.5 billion, according to CoinShares’ report ‘Digital Asset Fund Flows’.
BTC moved higher towards $70,000 over the weekend as price benefitted from the enthusiasm around the Bitcoin Conference 2024 taking place this Saturday in Nashville with multiple allocations from Corporations and Politics including Republican Donald Trump, who announced plans to embrace cryptocurrency if elected to a second term.
BTC is now facing the $70,000 as the next resistance while the $63,000 level acts as the next pivot line and could pave the way to a bearish move if we breach below.
BTC’s 30-day Historical Volatility – HV- cooled to around 30% this week, from 42% last week.
After rounding up 2023 performance to +155%, BTC closed out January up +0.7%, February up +43.7% and March +16.6%, BTC closed April down -15%, May +11% and June -7%. As of July, the MTD is currently at +8.3% with the YTD for 2024 being +61%.
ETH
Unlike BTC, ETH declined down to a low of $3,087 last week and posted losses of -6.6% over the week as price suffered from whale selloff profit-takings despite the launch of Spot ETH ETFs on July 23. Over the month of July, ETH is currently down -5%.
However, ETH regained over the weekend in the wake of the Bitcoin Conference and is trading this Monday near $3,315, evolving between its 100-day and 200-day MAs currently near $3,200 and $3,350. On the upside, $3,550 and $3,720 act as the next resistances while $3,100 and $2,830 serve as the closest support levels.
ETH saw significant gains earlier this year, closing January up +0.05%, February up +46%, and March up +9.2%, but April experienced a notable decline of -17.4% followed by a +25% gain in May and -9% in June. As of July, the month-to-date performance stands at -4.6%, with a year-to-date increase of +44%.
Other markets
The S&P and Nasdaq lost ground this past week as markets digested a tough week for tech stocks, particularly TSLA and GOOG. Meanwhile, signs of a sectoral rotation emerged, with the Dow and Russell 2000 benefiting from an influx of funds into small-caps amidst hopes of economic resilience and easing PCE inflation at 2.5%, in line with expectations.
The S&P and Nasdaq closed lower for the week, near 5,459 and 17,357 respectively, shedding -0.8% and -2.1%. Meanwhile, the VIX index moved higher to 16.9. Several factors may drive the market this coming week, including a heavy batch of corporate earnings, the FOMC meeting, and the July NFP employment report.
After ending 2023 up +17% and +29.6%, S&P and Nasdaq closed out January up +1.6% and +1.0%, February up +5.2% and +6.1%, March up +3.1% and +1.2%, April down -4.2% and – 4.4%, May +3.5 and +6.9%, and June up +3% and +6%, the MTD performances for July are currently of +0.08% and +2.1% with YTD performances of +14.6% and +15.6%.
DXY
DXY pursued its moderate and steady recovery, hovering below the 104.5 mark last week. The index faced mixed signals as US PCE inflation softened, while US economic data remained robust. Q2 GDP exceeded expectations at +2.8%, and the Composite PMI rose to 55.0 from 54.8, reaching its highest level since April 2022, indicating consistent growth over the past 18 months.
The index found some resistance last month near 105.6 – serving as a 38.2% Fib retracement level and retraced back to 103.7 on July 18 from where it was able to find support and start a moderate but steady recovery. The index is now confirming between its 100-day and 200-day moving averages, around 104.85 and 104.3, respectively.
Our outlook for DXY remains bearish for the remainder of the year as we expect bearish pressure to prevail as possible rate cuts are increasingly more likely.
US Treasuries
US Treasury yields dropped last week after the Federal Reserve’s preferred inflation gauge, the PCE data, met expectations of +2.5% year-over-year. The yield on the 10-year note closed lower at 4.19%, while the 2-year note dropped to near 4.39%, shrinking the inversion of the curve to only 20 basis points. While no rate cuts are expected at this week’s FOMC meeting, any updates on a possible September cut could move markets. According to the CME FedWatch Tool, the odds of a 25 basis point rate cut in September increased to 87% from 57% a month ago.
The 10Y is currently trading near 4.17% while the 2Y yield is evolving near 4.40%, setting the inversion of the yield curve to 23 bps.
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