BTC and ETH declined last week, the two cryptocurrencies were trading near $26,480 and $1,840 on Friday, down -2.8% and -3.5% from their level a week ago amidst a tumultuous week that saw the US S.E.C. crackdown on cryptocurrency exchanges Binance and Coinbase and several tokens from major blockchain networks – SOL, ADA, MATIC among others.
US Equities were up this past week, with the S&P 500 posting its fourth straight week of gains, flirting with its August 2022 high – 4,325 – and entering bull market territory – a 20% increase from its October low. The S&P and Nasdaq were trading on Friday near 4,298 and 13,259, notching gains of +0.4% and +0.1% respectively. The increase came in a context of low volatility where the VIX fell to its lowest level – 13.5 – since late January 2020, despite uncertainty over the direction of interest rates and inflation.
US Treasuries rose last week as investors digested the latest unemployment data and looked ahead to the Fed meeting. Weekly initial jobless claims yet reaching their highest level since October 2021 had little impact on prices ahead of the FOMC meeting. The possibility of a hike pause seems to prevail with markets currently pricing in a 23% chance of a 25-basis point hike during the next FOMC meeting, according to CME’s FedWatchTool. The yields on the 10-year and 2-year Treasuries were trading near 3.74% to 4.60% on Friday, up from 3.70% and 4.51% the week before.
DXY edged lower this past week, near 103.55 on Friday, with most of the losses coming from Thursday’s session with the release of the US jobless claims report confirming the slowing of the US economy. US CPI and Fed rate decisions will be the main drivers this week for price action.
Oil prices posted a second weekly decline as disappointing Chinese data and the incoming Fed rate decision overshadowed Saudi Arabia’s recent output cut to boost prices. The WTI was trading near $70 on Friday and is dropping today near $67 following Goldman Sachs’s oil price forecasts cut that was released this Sunday: analysts highlighting rising global supplies and concerns about demand growth, just ahead of key inflation data and the Fed’s rate decision.
BTC and ETH keep retracing today as markets turn their focus to this week’s FOMC meeting with Wednesday’s rate decision set to take center stage. Investors will also look ahead to key inflation data with Tuesday’s Consumer Prices data – CPI – and Producer Prices data – PPI – set to follow on Wednesday from The Bureau of Labor Statistics. As for the earnings season, Adobe, Kroger, and Oracle are set to report this week among others
CLIENT PROFITS
We entered long positions on some large caps – ADA, MATIC, SOL – last week the first time when BTC dipped below $26,000, and a second time through DCA over the weekend when Alt coins tumbled, bringing the long exposure to 20% of the AUM.
No changes were made last week regarding our short positions – 12% of AUM. 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 now 32% of the AUM, the rest being in cash.
BTC
BTC declined last week, trading near $26,480 on Friday, down -2.8% from its level a week ago amidst a tumultuous week that saw the US S.E.C. crackdown on cryptocurrency exchanges Binance and Coinbase, and several tokens from major blockchain networks – SOL, ADA, MATIC among others.
Bitcoin briefly dipped to a low near US$25,350 on Tuesday, breaking below our ascending parallel channel, before recovering and settling at $26,480 on Friday above US$26,000 the same day. BTC price continued to evolve near $26,000 and below our upward-sloping channel over the weekend.
BTC is currently trading near $25,900 with major supports near $25,000 and $24,000 further below.
BTC’s 30-day Historical Volatility – HV- increased over the past week and is now nearing 40% – from 34% last week.
BTC’s performance for June is down -4.2%. with the YTD performance for 2023 being +58%.
ETH
Like BTC, ETH retraced last week, trading near $1,840, down -3.5% from its level a week ago. ETH price is also falling today with ETH trading close to the $1,740 mark just above its nearest support of $1,715 and with next support near $1,650 – 200 MA – and $1,370 further below. On the upside the $1,890 mark acts as the main resistance.
ETH’s MTD performance for June is currently -5.9%, with the YTD performance being +47% – from +59% as of last week.
OTHER MARKETS
US Equities were up this past week, with the S&P 500 posting its fourth straight week of gains, flirting with its August 2022 high – 4,325 – and entering bull market territory – a 20% increase from its October low. The S&P and Nasdaq were trading on Friday near 4,298 and 13,259, notching gains of +0.4% and +0.1% respectively. The increase came against a backdrop of low volatility where the VIX fell to its lowest level -13.5 – since January 2020, despite uncertainty over the direction of interest rates and inflation.
S&P and Nasdaq’s MTD performance for the month of June are currently +2.2% and +3.5% and the YTD performances are +11.3% and +28% respectively.
DXY
DXY edged lower this past week, nearing 103.6 on Friday, with most of the losses coming from Thursday’s session with the release of the US jobless claims report confirming the slowing of the US economy. US CPI and Fed rate decisions will be the main drivers this week for price action.
The index is currently flat, trading near 103.6, testing its 103.5 nearest support, just above its upward-sloping trendline near 103.3 currently, and major support near 101 further below. On the upside, the 105.3 mark acts as major resistance –where the 200 MA is.
US TREASURIES
US Treasuries rose last week as investors digested the latest unemployment data and looked ahead to the Fed meeting. Weekly initial jobless claims yet reaching their highest level since October 2021 had little impact on prices ahead of the FOMC meeting. The possibility of a hike pause seems to prevail with markets currently pricing in a 23% chance of a 25-basis point hike during the next FOMC meeting, according to CME’s FedWatchTool. The yields on the 10-year and 2-year Treasuries were trading near 3.74% to 4.60% on Friday, up from 3.70% and 4.51% the week before.
The 10Y yield and the policy-sensitive 2Y are currently retracing, exchanging near 3.74% and 4.58%, yet still up from 3.69% and 4.47% last Monday, extending the inversion of the yield curve to 84bps – from 78 bps last week.