CFT Update Monday, November 21st
Crypto markets had a relatively steady week, with BTC and ETH consolidating around the $16,500 and $1,150 mark respectively as markets responded sideways to FTX and its related hurdles. US Equities dropped moderately last week amid concerns about the growth outlook in the US and the Fed’s intentions to persist in its fight against inflation. Oil dropped as Saudi Arabia eyes an OPEC production increase. DXY traded sideways last week as CPI’s latest data and Fed speaker Bullard’s Hawkish comment – peak rate – sent neutralizing signals to the market.
This week, investors will have an eye on the last batch of Q3 earnings – including technology companies DELL, and ZOOM – along with the meeting minutes from the FOMC’s latest monetary policy meeting, which will help investors assess the intentions of the Fed. This Wednesday Consumer Sentiment Index MSCI and this week’s Black Friday data will also help investors assess the current state of the US economy.
BTC and ETH are retracing today, trading near the $15,800 and $1,100 marks ($15,400 and $1,077 on some exchanges) whereas Equities are also decreasing today with Nasdaq and S&P trading at $11,025 (-1.1%) and $3,950 (-0.4%). DXY is regaining today, trading just below 108.
We opened new positions on some Large Cap coins today, bringing the exposure to the market to 40%, the rest being in cash. We still have our positions in BTC and a few altcoins. We currently prefer to stay around 40% exposure and monitor the situation to get more exposure to the market.
BTC started last week with gains on encouraging inflation news that could suggest a slowdown or Pivot from the Fed, but then retraced slightly on Wednesday and settled over the $16,500 mark to end the week near the $16,680 mark, reducing the losses for the week down to -2.0%.
BTC continued to lose some ground over the weekend sliding towards the $16,000 mark and is now trading near $15,800 as of writing, just below our downward sloping trendline, bringing the MTD performance for November down to -22 %.
While bear pressure is prevailing on the short term as the market continues to digest the FTX fallout and its yet-to-be-known aftermath – Genesis lately, the scenario of a slowdown or Pivot from the Fed, coupled with a stalling DXY could ignite a rebound in the medium term.
In the downside, the next supports to watch are 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.
In that respect, an indicative comparison with the previous dot-com bubble and the Lehman Brothers crisis could put in perspective the timing of a possible rebound in 2023.
In a similar fashion to BTC, ETH traded sideways before sliding by the end of the week towards the $1,200 mark, losing -5.8% on the week.
Price action continued to slide towards the $1,000 mark over the weekend, breaking below the lower band of our descending parallel channel. ETH is regaining moderately today, trading above the $1,100 mark, reducing the losses for the month to -29.5%.
Like BTC, we don’t see the bearish pressure fading any time soon while the uncertainty regarding the FTX fallout persists, despite the encouraging inflation data that could signal a Fed slowdown or Pivot in the medium term.
Price action is trading below the lower band of our descending parallel channel with a recent low of $1,070 acting as the main support and then $900 mark – the lowest of the year.
On the upside, the $1,250-mark acts as the resistance.
Traditional US Equity Markets experienced a relatively stable week, with the S&P and Nasdaq Comp losing -0.7% and +-1.6% respectively.
Today, US Equities are retracing slightly close to flat with S&P and Nasdaq down -0.7% and -1.6% respectively, bringing the month-to-date performance to +2% and +0.3%.
DXY traded sideways last week as CPI’s latest data, lower than expected, and Fed speaker Bullard’s Hawkish comment suggesting a peak rate of 5.25% – sent neutralizing signals to the market.
Price action started the week sliding towards the 105 level as the selloff was continuing after last week’s CPI data suggesting a potential slowdown from the Fed. However, DXY regained in the later part of the week with Bullard’s Hawkish comment propelling the index back to the 107 level.
DXY is gaining today, trading near the 108 level as lockdown concerns in China re-emerged with the new covid breakouts. DXY is still trading below our bearish channel and above its 200 MA – currently at 105.2- with the next support at 104.92. On the upside, the lower band of our descending channel acts as the main resistance, currently at 109.
The 10Y yield remained relatively stable over the week. It fell early in the week, reaching a month low of 3.67% – deepening further the inversion of the yield curve with the 2Y note yielding close to 4.53% – but rebounded in the latter part of the week as Fed policymaker J. Bullard indicated a more hawkish stance on monetary policy, reaching back up to 3.81% on Friday.
The 10Y yield was recovering today, trading near the 3.80% mark.