BTC and ETH were regaining early last week but then retraced at the end of the week as higher than expected Friday’s US jobs data had investors worry about further monetary tightening from the Fed, despite showing a relative slowdown of the economy.
Non-farm Payrolls for September came out higher – 263,000 jobs, expected 250,000- and unemployment rate lower than anticipations – 3.5% as 3.7% was expected.
Equities traded in a much similar but more vigorous way.
This week, investors will turn their focus on Thursday’s US Consumer Price Index data for September to better assess the state of inflation, which will give indication of how the Fed will move during November’s meeting.
BTC and ETH are now declining today, trading near the $ 19,300 and $ 1,300 mark, respectively, like US main Equity Markets, also sliding, whereas DXY is prolonging its gain.
Client Profits
We maintained our position this past week, keeping our portfolio exposure to the market to 34%, the rest is in cash. We still hold our positions in BTC and a few large-cap coins.
The short-term view remains the same as last week: should BTC test the $17,500 levels, we could consider adding funds to our existing long positions in BTC and Alts, as we still have 66% of the AUM in cash.
We are also keeping an eye on ETH price action as we could consider a trade if ETH breaks below the 1,200 level.
BTC
BTC has been trading near 20,000 early last week as markets were weighing the possibility that Fed could slow its monetary tightening, but last Friday’s release of US job market data had BTC dipped back towards the 19,500 level and below over the weekend.
Today BTC is continuing its retracement, just above the $19,300 mark, bringing the performance for the month down to -0.9%.
The trend is still bearish as strong inflation and US job data keep fuelling concerns for further rate hikes.
The probability for price action to re-capture the upward channel is still very low.
ETH
In a similar fashion to BTC, ETH traded sideways. Last week’s price action saw ETH trading just below the $1,400 mark before retracing in the latter part of the week towards the $1,300 mark as US job data came out higher than expected, making investors nervous about future rate hikes.
We believe ETH could continue on this bearish trend given the still strong inflation and US job market prospects. The next support could be the 1,250 mark – which if we pierce below, we could enter a swing trade- and then the next support would be the lowest of the year – $900 level.
Other markets
Equities were gaining early last week before declining sharply in the second half of last week, still ending the week positively with S&P 500 and Nasdaq COMP gaining +1.5% and +0.6% for the week on Friday.
Today, Equities are prolonging their decline, while investor digest last Friday’s US job market data and turn their focus to Thursday’s inflation report data.
DXY
DXY has been recouping the early week losses from last week in the latter part of that week, ending the week on a slightly positive note with + 0.5%. The rebound was fuelled by the relative decline of the other currencies -EUR, GBP, JPY- VS USD forming the index and the strong US job report leaving room for the Fed to think about further rate hikes.
DXY is now trading around the 113 mark with the 114.8-high level that could still act as a resistance for the coming weeks. If price action breaks above this level, the next level could be 120. On the downside, the 110- high level still acts as support.
US Treasuries
After breaking above the upsloping resistance and retracing below last week, the 10Y US Treasury bond yield rebounded and broke above the resistance once more, creating a fourth touching point. It is now trading around 3.99%, just below the high of 4.019% which serves as resistance for price action.
Thank you!
CFT Team.