BTC and ETH were mixed last week with BTC and ETH trading near $30,480 and $1,930 on Friday, respectively ending the week down -0.7% and up +2.1% as markets closely watched the evolution around the filing of BlackRock and other institutions’ Spot Bitcoin ETF, the SEC deeming the filings temporarily inadequate and requesting further details. Markets have started this holiday-shortened week steady with BTC confirming above the $30,200 mark and retesting the $31,000 as BlackRock and other institutions filed their amended application for a spot BTC ETF.
US Equities rose last week, with S&P and Nasdaq closing near 4,450 and 13,788, up +2.3% and +2.2% as investors welcomed the encouraging inflation data with PCE and core PCE rising +0.1% and +0.3% over last month and +3.8% and +4.6% on a yearly basis, lower than expected – +4.3% and 4.7% respectively. Last week also marked the end of the first half of 2023 with Nasdaq realizing its best first half-year performance – +31.7% – since 1983, thanks to AI-themed tech stocks rally and hopes of Fed’s rate slowdown. As for the S&P, the performance is +15.9% and is the best start to a year since 2019.
In that respect, an indicative comparison between the rallying US Equities and the contracting Monetary supply M2 could put in perspective the timing of a possible correction in stock markets considering the divergence currently occurring in 2023 as we can see in the graphs next.
US Treasuries rose last week with the yields on the 10-year and 2-year Treasuries trading near 3.84% and 4.90% from 3.74% and 4.75% the week before. Markets are currently pricing in an 86% chance of a 25-basis point hike during next week’s FOMC meeting in late July, according to CME’s FedWatchTool, which would bring the target rate to 5.25% – 5.50%.
DXY index edged higher last week, ending near 102.92 on Friday from 102.88 the week before with price driven by the robust U.S. economic data that pushed Treasury yields higher. Oil price remained steady near $70 over this past week, ahead of the OPEC seminar taking place this week in Vienna.
BTC and ETH are retracing today as investors digest the latest ISM data with June PMI coming at 46.0, their lowest level since May 2020 – 43.1%. and look ahead to the remainder of this week with markets closed on Tuesday in observance of Independence Day: Investors will eye Wednesday’s minutes of the Fed followed by Thursday’s JOLTS labor market report and Friday’s much-awaited Non-Farm Payrolls report for June.
Client Profits
We kept our short positions on ETH and BTC.
We also still have our long positions on some large caps – ADA, MATIC – that we opened when BTC dipped below $26,000, and a second time through DCA when Alt coins tumbled in early June.
The exposure to the market is 27% of the AUM, the rest being in cash.
BTC
BTC retraced last week, trading near $30,480 on Friday, respectively ending the week down – 0.7% as markets closely watched the evolution around the filing of BlackRock and other institutions’ Spot Bitcoin ETF, the SEC deeming the filings temporarily inadequate and requesting further details. Markets have started this holiday-shortened week steady with BTC confirming above the $30,200 mark and retesting the $31,000 as BlackRock and other institutions filed their amended application for a spot BTC ETF.
BTC is currently trading near $30,400 with major supports near $25,000 and $24,000 further below.
BTC’s 30-day Historical Volatility – HV- decreased over the past week and is now nearing 42% – from 49% last week.
BTC ended the month of June up +11.9%, benefitting from the first “BlackRock rally” in June, and the performance for July is currently down -0.3% with the YTD performance for 2023 being +84%.
ETH
Unlike BTC, ETH managed to edge higher last week, up +2.1%, inching closer to $1,950 on Friday before consolidating near this level over the weekend and early this week.
ETH is now evolving near $1,900, confirming above its MA50 near $1,830, with the 200 MA acting as major support currently near $1,695. The 200 MA is a strong indicator of the overall trend, if ETH breached below that level, the price could move downwards towards its next support near $1,700 and $1,370 further below.
ETH’s performance for June was +3.2% and the MTD performance for the month of July is currently -1.5%, with the YTD performance being +59%.
Other markets
US Equities rose last week, with S&P and Nasdaq closing near 4,450 and 13,788, up +2.3% and +2.2% as investors welcomed the encouraging inflation data with PCE and core PCE rising +0.1% and +0.3% over last month and +3.8% and +4.6% on a yearly basis, lower than expected – +4.3% and 4.7% respectively. Last week also marked the end of the first half of 2023 with Nasdaq realizing its best first half-year performance – +31.7% – since 1983, thanks to AI-themed tech stocks rally and hopes of Fed’s rate slowdown. As for the S&P, the performance is +15.9% and is the best start to a year since 2019.
In that respect, an indicative comparison between the rallying US Equities and the contracting Monetary supply M2 could put in perspective the timing of a possible correction in stock markets considering the divergence currently occurring in 2023 as we can see in the graphs below.
S&P and M2 Monetary Supply
S&P and Nasdaq’s performances for the month of June were +3.2% and +6.4%.
S&P and Nasdaq’s MTD performances for the month of July are currently close to flat for both indices and the YTD performances are +16% and +32% respectively.
DXY
DXY index edged higher last week, ending near 102.92 on Friday from 102.88 the week before with price driven by the robust U.S. economic data that pushed Treasury yields higher.
The index confirmed above its MA50 near 102.87 and breached the 103 mark.
DXY is currently trading near 103.1, just above its 50MA and above the 102-mark acting as the nearest support with 101 further below. On the upside, the 104.5-mark acts as major resistance –where the 200 MA is.
US Treasuries
US Treasuries rose last week with the yields on the 10-year and 2-year Treasuries trading near 3.84% and 4.90% from 3.74% and 4.75% the week before. Markets are currently pricing in an 86% chance of a 25-basis point hike during next week’s FOMC meeting in late July, according to CME’s FedWatchTool, which would bring the target rate to 5.25% – 5.50%.
The 10Y yield and the policy-sensitive 2Y are exchanging near 3.90% and 4.91% from 4.71% and 4.73% last week, extending the inversion of the yield curve to 101bps.