BTC and ETH traded lower last week with BTC and ETH trading near $30,340 and $1,870 on Friday, respectively ending the week down -0.4% and -3.2% as markets continued to closely monitor the evolution around the new batch of filings from BlackRock and other institutions for their Spot Bitcoin ETF, to comply further with the SEC’s request. BTC
US Equities declined as well last week, with S&P and Nasdaq closing near 4,399 and 13,661, down -1.2% and -0.9% as investors digested the disappointing NFP data and the latest Fed minutes, suggesting further tightening, but at a slower pace could be on the horizon with the board split on its decision to pause rate hikes in June. Nonfarm Payrolls in the US rose 209,000 in June, which came out lower than expected – 225,000.
US Treasuries rose last week with the 10-year Treasury yields jumping above 4%. The yields on the 10-year and 2-year Treasuries trading near 4.07% and 4.95% from 3.84% and 4.90% the week before. Following the latest minutes of the June FOMC meeting, probabilities of a rate hike in July have increased and markets are now pricing in a 92% chance of a 25-basis point hike during next week’s FOMC meeting late July, according to CME’s FedWatchTool, which would bring the target rate to 5.25% – 5.50%.
DXY index edged lower last week, ending near 102.27 on Friday from 102.92 the week before with price driven by a weakening dollar dampened by the US June Payrolls coming at only +209,000 VS +230,000 excepted.
Oil price gained, exchanging near $73.65 on Friday, with price driven by the enthusiasm around the demand in China and additional OPEC+ supply cuts from Saudi Arabia and Russia
BTC and ETH are up moderately today as investors digest the mix of weak job growth and wages and shift their focus to this week’s June inflation readings and the start of the earnings season with major financials set to report – BlackRock, Citi Group, JP Morgan, Delta Airlines. Investors will eye Wednesday’s Consumer Price Index (CPI) report and Thursday’s Producer Price Index (PPI) while keeping an eye on Friday’s preliminary numbers from the University of Michigan’s Consumer Sentiment Index for July.
CLIENT PROFIT
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 traded lower last week, exchanging near $30,340 on Friday, down -0.4% over the week as markets continued to closely monitor the evolution around the new batch of filings from BlackRock and other institutions for their Spot Bitcoin ETF, to comply further with the SEC’s request.
BTC is currently testing the $31,000 with a spike just above that mark this Monday, while price action has been contained to a narrow range between 30,000 and 31,000. There is a risk of a dropback if BTC doesn’t find the momentum to break through to the upside with major supports near $28,000, $25,000, and $24,000 further below.
BTC’s 30-day Historical Volatility – HV- dropped over the past week and is now nearing 36% – from 42% 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 +0.4% with the YTD performance for 2023 being +85%.
ETH
Like BTC, ETH traded lower last week, exchanging near $1,870 on Friday, down -3.2% over the week. Price action was confirmed above $1,950 earlier last week but retraced and settled near $1,850 towards the end of the week and over the weekend.
ETH is now evolving near $1,890, retesting its MA100 near $1,860, with the 200 MA acting as a major support currently near $1,710. 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 July is currently -2.2%, with the YTD performance being +58%.
OTHER MARKETS
US Equities started the second half of the year in the red last week, with S&P and Nasdaq closing near 4,399 and 13,661, down -1.2% and -0.9% as investors digested the disappointing NFP data and the latest Fed minutes, suggesting further tightening, but at a slower pace could be on the horizon with the board split on its decision to pause rate hikes in June. Nonfarm Payrolls in the US rose 209,000 in June, which came out lower than expected – 225,000.
S&P and Nasdaq’s MTD performance for July are currently -0.9% and -0.7% and the YTD performances are +14.8% and +30.7% respectively – from +16% and +32% respectively as of last week.
As mentioned last week, 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.
DXY
DXY index edged lower last week, ending near 102.27 on Friday from 102.92 the week before with price driven by a weakening dollar dampened by the US June Payrolls coming at only +209,000 VS +230,000 excepted.
The index dropped below its MA50 near 102.88 last Friday and is testing 102 this week.
DXY is currently trading near 101.9, just below the 102 mark with 101 acting as the nearest support further below. On the upside, the 104.5-mark acts as major resistance –where the 200 MA is currently.
US TREASURIES
US Treasuries rose last week with the 10-year Treasury yields jumping above 4%. The yields on the 10-year and 2-year Treasuries trading near 4.07% and 4.95% from 3.84% and 4.90% the week before. Following the latest minutes of the June FOMC meeting, probabilities of a rate hike in July have increased and markets are now pricing in a 92% chance of a 25-basis point hike during next week’s FOMC meeting 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 currently exchanging near 4.00% and 4.87% from 3.90% and 4.91% last Wednesday, reducing the inversion of the yield curve to 87bps, from 101 bps last Wednesday.