BTC and ETH continued to experience a steady week, with BTC and ETH trading sideways around the $16,200 and $1,150 levels as markets welcomed the dovish tone coming from the FOMC’s latest monetary policy meeting, hinting at a slower pace of rate hikes going forward, but remained nervous as they continued to learn about the FTX’s aftermath.
US Equity markets also started turning green on Tuesday and continued the trend on Friday’s shortened session amid the Thanksgiving holiday. Oil prices dipped lower this week against a background of covid outbreaks in China, US inventory builds and uncertainty about G7/EU oil price cap talks.
This week, investors will turn their focus to this Friday’s Non-Farm Payroll jobs report for the month of November while keeping an eye on Fed’s Bullard comments on inflation and the Cyber Monday sales that could help gauge the health of the U.S. retail sector. The latest data from the housing markets will also be in the spotlight with the FHFA U.S. home price index and S&P Case-Shiller U.S. home price index release on Tuesday.
BTC and ETH are retracing today, trading near the $16,200 and $1,150 marks whereas Equities are also retracing from last week’s rally, with Nasdaq and S&P closing at 11,049 (- 1.5%) and 3,963 (-1.5%). DXY is trading close to flat after last week’s retracement, currently near the 106.6 level.
Client Profits
No new trades were made. We kept our same exposure to the market this week – set to 40%, the rest being in cash. We still have our positions in BTC and a few large-cap coins.
BTC
BTC ended last week slightly negative with a loss of -1.1%. Price action started last week with losses, dropping towards the $15,500 level but rebounded on Tuesday, breaking above our descending trendline with the minutes from the FOMC’s latest monetary policy meeting, indicating Fed was eyeing slower rate hikes as the recession threat is growing. BTC rallied towards the $16,500 level before settling around that level, reducing the losses for the week to -1.1%.
BTC remained relatively stable over the weekend, retracing slightly towards the $16,400 mark and is now continuing its retracement today, trading near the $16,200 level, bringing the monthly performance for November to -21%.
If in the short term, bear pressure continues to prevail as markets remain nervous about the FTX fallout and its aftermath, the recent indications from the Fed combined with a stalling DXY could spur some momentum in the medium term.
Key levels remain the same as last week with the next supports to watch on the downside being the $13,900 /$12,090 level and then the next support would be near $9,000. On the upside, the $17,600-mark acts as resistance.
ETH
In a similar fashion to BTC, ETH started the week with losses, sliding towards the $1,050 level but rebounded on Tuesday before settling down on Friday just below the $1,200 mark, losing -1.1% on the week.
Price action remained stable over the weekend, but ETH is now retracing, trading near the $1,150 mark, bringing the MTD performance for November to -26%.
Price action is now trading above the lower band of our descending parallel channel with a recent low of $1,070 still acting as main support and then the $900 mark – the lowest of the year.
On the upside, the $1,250-mark acts as the resistance.
As mentioned last week, we don’t see the bearish pressure fading any time soon while the uncertainty regarding the FTX fallout persists, despite the encouraging readings from the FOMC’s minute meeting, hinting at a Fed slowdown or Pivot in the medium term.
Other markets
US Equity markets had a short but positive week, turning green amid the Thanksgiving holiday with S&P and Nasdaq Comp gaining +1.5% and +0.7% respectively as investors assessed the prospects for a less-aggressive Fed tightening and weighed China’s latest measure to stimulate its economy.
Today, US Equities are retracing with S&P and Nasdaq down -1.54% and -1.58% respectively, bringing the month-to-date performance to +3.1% and +1.3%.
GOLD
Gold price also benefited from last week’s FOMC minute meeting pointing at a more dovish tightening from the Fed. Gold is now retracing today, currently at $1741.5.
DXY
Understandably, DXY traded in an opposite way to crypto and main US Equities with the prospects of a slower rate hike pace on the US Dollar. DXY lost ground on Tuesday, sliding towards a low of 105.6 on Thursday before settling on Friday at 106.
DXY is gaining some traction today, trading around 106.6 as the ongoing situation regarding China’s zero-case Covid-19 policy is raising concerns.
DXY is still trading below our bearish channel, and just above its 200 MA – 105.3 currently with the next support at 104.92. On the upside, the lower band of our descending channel still acts as the main resistance, currently at 108.8.
US Treasuries
The 10Y yield started last week on a high but dropped as well on Tuesday, reaching a weekly low on Friday of 3.65%, offsetting the good performance of Monday.
The 10Y yield is trading flat today, at 3.68% as of writing and the 2Y note is at 4.44% – reducing the inversion of the yield curve that we mentioned last week.