BTC and ETH wrapped up the past week in mixed order, with BTC hovering below $63,000 and notching a fourth consecutive week of losses while ETH managed to snap its losing streak and edge higher near $3,200. The two cryptocurrencies were trading near $63,760 and $3,130 on Friday, respectively down -0.1% and up +2.3% over the week as investors digested the US regulatory crackdown on unregistered crypto services from the FBI and the US Senate heightened scrutiny on crypto transactions, amidst disappointing Spot BTC ETF volumes and BlackRock registering its first-ever $0 inflow day on Apr 24 since the inception of spot BTC ETFs in January. Negative weekly outflows of -$435m from Spot BTC ETFs brought the year-to-date total to US$13.01 billion, according to the CoinShares report âDigital Asset Fund Flowsâ.
US Equities bounced back this past week, fuelled by encouraging Tech corporate earnings â Alphabet, Microsoft, inflation data in line with expectations and signs of a slowing economy, keeping hopes of rate cuts alive for 2024. GDP growth for Q1 2024 was lower than expected at +1.6% while PCE March data came out at +2.7% on a 12-month basis, with Core PCE at +2.8%, overshadowing a declining Consumer Sentiment in April of 77.2, from Marchâs 79.4 figure. S&P and Nasdaq closed out this Friday higher, near 5,099 and 15,927, respectively notching +2.7% and +4.2% while the VIX index settled near 14% after its spike to 21.4%, the week before.
US Treasury yields continued their move higher benefitting from the robust PCE data, adding up to the hotter-than-expected CPI and the hawkish stance from J. Powell from the week before, which bolstered market expectations that rates could stay higher for longer. While the scenario of no rate cuts in 2024 has been gaining weight, the market still expects a rate cut in September as the odds of a 25bps rate cut in September 2024 are now 44%, from 30% a month ago per the CME FedWatch Tool. The 10Y yield hit a high of 4.74% on Thursday 25, nearing the upper limit of its year-long range, before retracing from that resistance and is currently trading near 4.62% while the 2Y yields are evolving near 4.98%, both yields being up from 4.61% and 4.98% the previous week.
Unlike yields, DXY didnât benefit from the robust inflation PCE data and edged moderately lower, hitting a low of 105.41 and closing out the week near 106.1. The index is retracing today on rumors that a yen-buying intervention by Japanese authorities may be on the way for the first time in 18 months.
Oil prices edged higher this week, the WTI closing near $83.64 from $82.07 the week before. This increase followed remarks from the World Bank warning about potential output issues due to ongoing tensions in the Middle East, emphasizing global supply disruptions.
BTC and ETH are trading down today as markets look ahead to this weekâs agenda where the Fedâs meeting spanning from Tuesday to Wednesday followed by Jowellâs press conference should take center stage this week. On Wednesday, investors will also receive the April ISM manufacturing along with the ADP report. Additionally, markets will look ahead to a new batch of corporate earnings with Apple, Amazon, AMD, Coca-Cola, and McDonaldâs set to report among others – while keeping on Wednesdays for April as well as Fridayâs NFP job report and ISM services for the month of April.
Client Profits
We executed our trading strategy effectively, outperforming the market amid the recent downturnâwhile the market saw a 60%-70% drop since March, our portfolio experienced only a 13% decrease, achieving a performance ratio of nearly 6:1.
We strategically opened short positions on BTC, and ETH, and selected Altcoins to diversify and reduce the risk in our primarily long-positioned portfolio.
Considering the Federal Reserveâs current monetary policy trajectory towards tighter financial conditions and reduced likelihood of rate cuts, we anticipate that the markets may shift to a ârisk-offâ stance in the upcoming months. This environment is expected to drive cryptocurrencies, including BTC, towards new lows, which aligns with our short to medium-term price targets.
BTC
BTC wrapped up the past week down, hovering below $63,000 and notching a fourth consecutive week of losses. The cryptocurrency was trading near $63,760 on Friday, shedding -0.1% over the week, as investors digested the regulatory crackdown on unregistered crypto services from the FBI and the US Senate, heightened scrutiny on crypto transactions, amidst disappointing Spot BTC ETF volumes and BlackRock registering its first-ever $0 inflow day on Apr 24 since the inception of spot BTC ETFs in January. Negative weekly outflows of -$435m from Spot BTC ETFs brought the year-to-date total to US$13.01 billion, according to the CoinShares report âDigital Asset Fund Flowsâ.
On the daily chart, BTC price has been experiencing a pullback phase after hitting a new ATH of $73,915 on Mar 14. Last week, BTC found support along its ascending trendline near $59,800 and bounced back to then slowly fade as the price neared its upper resistance line of about $68,000. BTC is currently exchanging near $62,800 with prices evolving between its two ascending trendlines near $61,000 and $69,000 acting as the closest support and resistance. On the downside, the next support zone would be $59,000.
In the short to medium term, geopolitical uncertainties along with monetary outlooks and Spot ETH approvals are set to play major catalysts for the remainder of the year. The geopolitical tensions and inflation outlook seem to have prevailed on the positive momentum fuelled by the growing ETF inflow in 2024, casting concerns over the strength of the economy to sustain higher for longer rates and avoid a stagflation cycle.
BTCâs 30-day Historical Volatility â HV- edged lower to around 50% this week, from 65% last week.
After rounding up 2023 performance to +155%, BTC closed out January up +0.7%, February up +43.7%, and March +16.6%, the MTD performance for April is currently -12.5 % with the YTD for 2024 being +47.6%.
ETH
ETH outperformed BTC this week, snapping a losing streak to edge higher near $3,200. The cryptocurrency was trading near $3,130 on Friday, up +2.3% over the week.
Over the past month, the price found support near $3,000 and moved higher in the last 2 weeks, thus forming a potential bear flag pattern indicative of a possible bearish trend continuation.
ETH is currently exchanging $3,200 with the $2,700 and $3,400 zones acting as major support and resistance.
After rounding up 2023 up +90.6%, ETH closed out January up +0.05%, February up +46% and March up +9.2%. The MTD for April is currently of -13.4% with the YTD for 2024 of +38.4%.
Other markets
US Equities bounced back this past week, fuelled by encouraging Tech corporate earnings â Alphabet, Microsoft â and inflation data in line with expectations, keeping hopes of rate cuts alive for 2024. PCE March data came out at +2.7% on a 12-month basis, with Core PCE at +2.8%, overshadowing a declining Consumer Sentiment in April of 77.2, from Marchâs 79.4 figure. S&P and Nasdaq closed out this Friday higher, near 5,099 and 15,927, respectively notching +2.7% and +4.2% while the VIX index settled down to 14% after its spike to 21.4%, the week before.
After ending 2023 up +17% and +29.6%, S&P and Nasdaq closed out January up +1.6% and +1.0%, February up +5.2% and +6.1% and March up +3.1% and +1.2%, the MTD performances for April are currently of +6.9% and +4.2% with YTD performances of +6.9% and +6.1%.
DXY
Unlike yields, DXY didnât benefit from the robust inflation PCE data and edged moderately lower, hitting a low of 105.41 and closing out the week near 106.1. The index is retracing today on rumors that a yen-buying intervention by Japanese authorities may be on the way for the first time in 18 months.
The index has been trading away from its 100-day and 200-day MAs and is now consolidating near 105.6 while the 105 level acts as the closest support.
DXY has been benefitting lately from robust inflation pressures and hawkish comments from Fed officials raising the prospect of a higher for longer rates scenario and validating the Fedâs intention to push back on potential rate cuts. The outlook for the index remains challenging as inflation pressure is expected to cool down later in the year.
US Treasuries
US Treasury yields continued their move higher benefitting from the robust PCE data, adding up to the hotter-than-expected CPI and the hawkish stance from J. Powell from the week before, which bolstered market expectations that rates could stay higher for longer. While the scenario of no rate cuts in 2024 has been gaining weight, the market still expects a rate cut in September as the odds of a 25bps rate cut in September 2024 are now 44%, from 30% a month ago per the CME FedWatch Tool.
The 10Y yield hit a high of 4.74% on Thursday 25, nearing the upper limit of its year-long range, before retracing from that resistance and is currently trading near 4.62% while the 2Y yields are evolving near 4.98%, both yields being up from 4.61% and 4.98% the previous week, maintaining the inversion of the yield curve to 37 bps