CFT Update, Monday Mar 13th 2023
BTC and ETH had a tumultuous past week, with BTC falling below $20,000 for the first time since January. BTC and ETH settled last Friday near $20,200 and $1,430, down -9.8% and – 8.9% with most of the drop stemming from Thursday and Friday’s sessions as the latest financial hurdles at Silvergate, Signature Bank and SVB Group as well as the USDC Depeg spurred concerns and had investors worry about further distress in the economy – overshadowing the hotter than expected NFP figures coming in at 311,000 – 250,000 expected.
US Equities dropped, with S&P and Nasdaq closing near 3,861 and 11,139, down -4.5% and – 4.7% over the week while US Treasury yields also dipped with the yields on the 10Y and 2Y Treasury notes losing more than 5% during Friday’s session and closing near 3.70% and 4.60% – from 3.96% and 4.86% the week before. According to the CME FedWatch tool, the chances of raising interest rates to 4.75-5% by hiking interest rates with a 25 bps rate hike have scaled down to 71%. DXY managed to edge higher at 104.6 on Friday – from 104.5 the week before – and Oil price remained flat over the week near $76.
Cryptos and Equities have however regained and surged during Monday’s session as investors welcomed Sunday US regulators’ intervention to backstop both depositors and financial institutions associated with Silicon Valley Bank as well as the Fed’s intention to provide loans up to one year for institutions affected by the bank failures.
This week, investors brace for a packed week in the wake of the SVB collapse which may still take center stage as markets remain cautious about the possible aftermaths for the broader economy. Markets will eye Tuesday’s Consumer Price Index – CPI – for the month of February as well as Wednesday’s Producer Price Index -PPI- to better gauge the state of inflation in the US along with some updates on the housing markets and retail sales figures ahead of the Fed’s next meeting later this month. On Friday investors will pay attention to the University of Michigan Consumer Sentiment Index – MCSI – as well as the industrial production numbers for the month of February.
Client Profits
We took profits on all of our short positions this past week, including ETH at $1,380 and had flipped long on BTC and a few large-cap coins.
Yesterday and this Monday, we took profit on our long positions on a few large-cap coins and BTC near $23,500.
We are currently fully invested in cash $.
We are considering opening shorts this week if BTC breaks over $25k.
BTC
BTC had a tumultuous past week, settling last Friday near $20,200, down -9.8% with most of the drop stemming from Thursday and Friday’s sessions as the latest financial hurdles at Silvergate, Signature Bank and SVB Group, as well as the USDC Depeg, spurred concerns about further distress in the economy.
Price action was edging lower early last week but tumbled during Thursday’s session with BTC losing -6% on that day, sending
BTC’s 30-day Historical Volatility – HV- is above the 60% mark.
BTC managed to offset most of the losses over the weekend, surpassing the $22,200 on Sunday – from a low of $19,560 during last Friday’s session as investors welcomed Sunday US regulators’ intervention to backstop both depositors and financial institutions associated with Silicon Valley Bank as well as the Fed’s intention to provide loans up to one year for institutions affected by the bank failures.
BTC continues to soar today, now trading near $24,300 (+9.4%), bringing the MTD performance for March to +5% and the YTD performance for 2023 to +47%.
On the upside, the $24,500 region still acts as resistance and is now being tested with next resistances near $25,000 and $27,000 while the next support to watch in the downside is the upsloping support of the parallel channel, near the $22,800 level currently and then the ATH from Dec 2017 just under $20,000 and major support near $18,350 further below.
ETH
Like BTC, ETH had a tumultuous week, trading near $1,430 on Friday with a low of $1,360 during the session, down -8.9% over the week from its $1,560 level the week before. ETH’s decline was accentuated by Thursday’s comments made by New York State Attorney General Letitia James indicating Ether should be registered as a security in her lawsuit against cryptocurrency exchange Kucoin. On Friday, the latest financial hurdles at crypto-friendly financial institution Silvergate Capital, as well as at Signature Bank and SVB Group spurred concerns about further distress in the economy and had investors worry about the potential aftermaths for the economy as the stablecoin USDC started to lose its peg.
However, like BTC, ETH price recovered most of the losses over the weekend with ETH reaching back up to the $1,600 level on Sunday and now trading up, near $1,680, bringing the MTD performance for March to +4.0% and the YTD performance to +39.5%.
Price action has re-joined our upsloping parallel channel over the weekend and is now evolving within this channel with the $1,800 level acting as resistance and on the downside our upward-sloping trendline acting as minor support, currently near $1,530 with major support near $1,350.
Other markets
US Equities dipped last week as well, with S&P and Nasdaq closing near 3,860 and 11,138, down -4.5% and -4.7% with last Friday awaited NFP numbers for February coming in higher than expected – 311,000 vs 250,000 expected – but being overshadowed by the latest financial hurdles at SVB Group and Signature Bank.
S&P and Nasdaq price actions continuously edged lower over the week, with most of the losses stemming from Thursday and Friday when price actions broke below their respective 200 MA level and are now trading below this level – 200 MA currently near 3,940 and 11,390.
S&P and Nasdaq are starting this week in positive territory, near 3,855 and 11,190, bringing the MTD performance for the month of March to -0.8% and -0.6% and the YTD performance to +2.6% and +8.8% respectively.
DXY
Despite the bearish sentiment hitting Bonds Equities and Cryptos, DXY managed to edge higher, trading near 104.6 on Friday – from 104.5 the week before.
However, unlike Equities today, DXY is prolonging the decline as investors reassess their Fed bets in the wake of the SVB turmoil and the US regulators intervention. According to the CME FedWatch tool, the chances of raising interest rates to 4.75-5% by hiking interest rates with a 25 bps rate hike have scaled down to 71%.
DXY is now trading down, near 103.6, just above its 103.4 support and still below its 200 MA acting as resistance – near 106.6 currently.
US Treasuries
US Treasury yields dipped last week with the yields on the 10Y and 2Y Treasury notes losing more than 5% during Friday’s session and closing near 3.70% and 4.60% – from 3.96% and 4.86% the week before.
With the recent interventions from the US regulators and the Fed, investors are now revising their Fed rate expectations early this week. The 10Y and 2Y yield are trading lower today near 3.54% and 4.02% as the chances of raising interest rates to 4.75-5% have scaled down to 71%.