BTC and ETH advanced moderately this week, surpassing the $17,000 and $1,250 levels in the last week as investors welcomed Wednesday’s Fed chair J. Powell’s moderate remarks hinting at a 50bps rise in December’s meeting, which spurred bets of a Fed rate slowdown or pivot in the near future and drove prices up for the rest of the week despite the relatively strong Non-Farm Payroll data on Friday – Nonfarm payrolls increased by 263,000, above the 200,000 estimates.
Equities ended the week with gains as well with most of the gains coming from Wednesday and Friday’s sessions, making up for the losses incurred earlier in the week. After a difficult start of the week, hitting a year low of $73.6, Oil price recovered some of its losses with the WTI trading towards $80 at the end of the week as OPEC was to stick to its production cut ahead of the new Western sanctions on Russian oil exports.
This week, investors will have their focus on Monday’s US Manufacturing and Services data – PMI and ISM as well as Friday’s final Producer Price index PPI and early readings of the Consumer Sentiment Index -MCSI, a batch of data that could help gauge the health of the US economy and the inflation in the country in anticipation of next week’s Fed meeting.
BTC is retracing moderately (-0.95%) today, and ETH losing -1.86%, hovering below $16,700 and $1,260 respectively. Equities are losing ground today as well, with Nasdaq and S&P closing at 11,239 (-1.79%) and 3,998 (-1.93%). DXY is up (0.75%), recovering some of the losses from last week, currently near the 105.2 level – from 106.6 last Monday.
Client Profits
No new trades were made this past week. 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 the week with gains of 3.4% for the week. Price action was settling near $16,300 early in the week but rallied on Wednesday with J. Powell’s moderate comment hinting at a 50bps hike at the Fed’s December meeting.
BTC slipped over the weekend as investors were digesting the stronger than expected US Non-Farm Payrolls numbers for November with an unemployment rate unchanged at 3.7%, which could weigh in the Fed’s rate decision this month.
BTC is prolonging the retracing today, trading near $16,920, bringing the performance for December to -0.07%.
In the medium term, the trend is still bearish with a risk of a recession looming and the lingering aftermath of the FTX collapse; the next supports to watch in the downside being the $13,900 /$12,090 level and then next support would be near $9,000.
However, the potential of a Fed slowdown or pivot combined to a stalling DXY and more clarity brought by the US regulatory framework in 2023 could fuel a rebound in the longer term. On the upside, the $17,600-mark still acts as resistance.
ETH
In a similar fashion to BTC, ETH started the week with moderate losses, closing near $1,167 on Monday but rallied later on Wednesday before settling on Thursday and Friday below the $1,300 mark, gaining +8.0% over the week.
ETH dropped slightly over the weekend with a low of $1,236 and is now trading close to $1,255, bringing the performance for December to -3%.
Price action is still trading within our descending parallel channel but is also trading within a narrower ascending channel with a recent low of $1,070 still acting as main support and then the $900 mark – lowest of the year. On the upside, the $1,250-mark acts as the resistance.
We see the bearish pressure continuing in the short term while the uncertainty regarding the FTX fallout persists, despite some moderate comments from Fed speakers, hinting at a Fed slowdown or Pivot in the medium term.
Other markets
US Equity markets printed some gains over the week, with S&P and Nasdaq Comp gaining +1.2% and +2.1% respectively.
US Equity markets started last week in a similar fashion to cryptocurrencies, with losses, and spiked on Wednesday with J. Powell comments. However, Equities ended the week with more pronounced losses during Friday’s session as NFP data came out higher than expected – 263,000 vs 200,000 expected.
Today, US Equities are kicking off the week with losses, extending the losses from last Friday as the US services gauge rose unexpectedly, fuelling speculation that the Fed could keep its policy tight to fight inflation.
S&P and Nasdaq are down -1.79% and -1.93% respectively, bringing the month-to-date performance to -1.1% and -1.1%.
WTI
Following the dip fuelled by the unknown consequences of the covid outbreaks on China’s economy, the US inventory builds and the uncertainty about G7/EU oil price cap, oil price recovered this past week some of its losses with the WTI trading towards $80 with the prospects of maintained production cut by OPEC and new Western sanctions on Russian oil exports boosting prices.
WTI is now trading near $78, erasing some of the performance made in the past week.
Thank you!
CFT Team