BTC and ETH dropped last week, with BTC briefly touching the $25,800 support. The two cryptocurrencies were trading near $26,800 and $1,810 on Friday, down -9.2% and -9.4% as investors dealt with the latest inflation and sentiment data as well as the temporary suspension of Bitcoin withdrawals on Binance due to congestion issues.
US Equities ended this past week mixed with S&P falling for a second consecutive week down -0.29% while Nasdaq notching a +0.40% gain, benefitting from the strong Tech corporate earnings amidst concerns over the US economy, the persisting debt ceiling negotiations, and disappointing Michigan’s consumer sentiment index falling to a six-month low of 57.7 – 63 expected- which dampened investors’ sentiment in addition to the CPI data showing the cooling of a yet inflation – prices rose 4.9% yearly VS 5% expected and a Core CPI of 5.5% VS 5.6% expected. S&P and Nasdaq closed the week mixed near 4,124 and 12,284 from 4,136 and 12,235 a week ago.
US Treasury yields managed to edge higher last week with yields benefitting from the hawkish comments from Fed officials P. Jefferson and J. Bullard defending the US central bank’s current monetary policy in its fight against inflation.
DXY gained last week, ending the week near 102.7 on Friday from 101.28 the week before. Oil prices declined over last week as investors remained to worry the high-interest rates environment could put pressure on global economic activity and dampen the demand for energy commodities. The WTI traded near $70 last Friday from $71 the week before.
BTC and ETH are regaining today as, this week, investors will turn their focus to Tuesday’s retail sales figures for April to better assess consumer spending against a backdrop of sticky inflation as well as the latest housing market data – building permits housing starts, and existing home sales and the release of the housing market sentiment index from the National Association of Home Builders – NAHB. Investors will also keep an eye on the remainder of the earnings season with major companies set to report – Alibaba, Home Depot, Target, and Walmart among others – as well as the GDP data for Japan and the eurozone before the G7 summit held in Japan this Friday. Crypto Investors will also keep an eye on the Bitcoin 2023 conference taking place in Miami this week.
Client Profits
No changes were made last week.
We kept our short positions on BTC and ETH, with our last short positions opening when BTC and ETH neared the $30,100 and $2,010 levels, which currently represent strong unrealized profits.
The exposure to the market is still 12% of the AUM, the rest being in cash.
BTC
BTC dropped last week, briefly touching the $25,800 support before bouncing back and settling near $26,800 last Friday as investors dealt with the latest inflation and sentiment data while monitoring the temporary suspension of Bitcoin withdrawals on Binance due to congestion issues and the rising popularity of some meme coins.
BTC’s 30-day Historical Volatility – HV- is nearing 42%, slightly down from its level from a week ago near 44%.
BTC experienced a continuous drop over 8 consecutive trading sessions as investors digested the cooling yet sticky inflation data and Binance liquidity issues. BTC fell below the $26,000 mark on Friday before bouncing back from the $25,800 support and settling towards $26,800 over the weekend.
BTC’s performance for May is down -6%. with the YTD performance for 2023 being +66%.
BTC is recovering from its losses today, evolving near the $27,350 with next support close to $27,000, the $25,000 major support next, and other major supports near $24,000 and $21,900 further below. As an indication, if BTC manages to break above the $28,700 mark, we may see its price heading toward $30,000 and above – which is unlikely in our opinion.
ETH
Like BTC, ETH declined last week as well, breaking below the $2,000 mark and trading near $1,810 on Friday, down -9.4%. ETH experienced losses over 6 consecutive trading sessions briefly piercing below the $1,740 mark before settling near $1,790 over the weekend.
ETH is regaining today, trading near $1,830, testing the $1,800 support with the next support near $1,700 and major support near $1,500. On the upside, our upward-sloping trendline acts as the next resistance near $1,850 currently.
The MTD performance for May is now of -2.2% and the YTD performance for 2023 of +53%.
Other Markets
US Equities ended this past week mixed with S&P falling for a second consecutive week down -0.29% while Nasdaq notching a +0.40% gain, benefitting from the strong Tech corporate earnings amidst concerns over the US economy, the persisting debt ceiling negotiations, and disappointing Michigan’s consumer sentiment index falling to a six-month low of 57.7 – 63 expected- which dampened investors’ sentiment in addition to the CPI data showing the cooling of a yet inflation – prices rose 4.9% yearly VS 5% expected and a Core CPI of 5.5% VS 5.6% expected. S&P and Nasdaq closed the week mixed near 4,124 and 12,284 from 4,136 and 12,235 a week ago.
S&P and Nasdaq’s MTD performances for May are now -1% and +1.1% and the YTD performances are +7.5% and +18.1% respectively.
Other Markets DXY
DXY gained last week, ending the week near 102.7 on Friday from 101.28 the week before. The index traded sideways near 101.5 over the week and gained some traction during Thursday and Friday sessions.
DXY is currently trading near 102.44, inching closer to the 102.7 resistance – where our upward-sloping trendline currently is – and away from its closest support near 100.7.
US Treasuries
US Treasury yields managed to edge higher last week with yields benefitting from the hawkish comments from Fed officials P. Jefferson and J. Bullard defending the US central bank’s current monetary policy in its fight against inflation.
The yields on the 10Y and 2Y Treasury notes closed near 3.47% and 3.99% on Friday- from 3.44% and 3.92% the week before.
The 10Y yield and the policy-sensitive 2Y are currently up, near 3.50% and 4%, in line with their levels from a week ago – 3.51% and 4% last Monday, maintaining the inversion of the yield curve to 49bps.2% the week before.
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