Weekly Report CFT Monday, June 24th, 2024
BTC and ETH wrapped up the past week with mixed results. BTC hit a 5-week low near $63,310, marking a second consecutive week of losses, while ETH eked out some gains as price benefited from the SEC’s decision to drop its legal classification investigation into ETH as a security, thus confirming its status as a commodity and igniting a wave of optimism. On Friday, BTC and ETH were trading near $64,100 and $3,515, respectively, with BTC down – 2.9% and ETH up +1.0% over the week, bringing their year-to-date performances to +52% and +54%. Meanwhile, digital asset investment products experienced a second consecutive week of outflows, bringing the year-to-date total to $15.9 billion, according to CoinShares’ report ‘Digital Asset Fund Flows’.
US equities rose this past week, despite a difficult end to the holiday-shortened week led by a relative pullback in tech stocks. The S&P and Nasdaq closed higher for the week, near 5,464 and 17,689 respectively, edging up +0.6% and +2.7%. Meanwhile, the VIX index inched higher to 13.2. Several factors may drive the market this coming week as PCE inflation data, GDP revisions, and Nvidia’s shareholder meeting are all set for later this week.
US Treasury yields remained flat last week in the absence of major events, despite mixed economic signals from the expanding June Flash PMI and rising jobless claims. Much of the trading volume occurred amidst a “concession” rebalancing context ahead of this week’s $183 billion auction of two-, five-, and seven-year Treasury notes on June 25-27. The yield on the 10-year note closed higher at 4.25%, while the 2-year note climbed to 4.74%. The odds of a 25bps rate cut in September increased to 61% from 45% a month ago, according to the CME FedWatch Tool.
DXY rose last week, benefitting from more dovish central bank measures and the political turmoil in France weighing on the Euro. On June 20, the Swiss National Bank cut rates for the second consecutive time, aligning with the BoC and ECB’s decisions to cut interest rates earlier this month. DXY rose in the latter part of the week to finish higher overall, hitting a high of 105.92 and closing near 105.83 on Friday.
Oil prices gained last week, boosted by signs of improving U.S. oil demand—21.1 million bpd—and falling fuel inventories, which decreased by 2.5 million barrels in the week ending June 14, slightly more than the expected 2.2 million. Additionally, ongoing Middle East tensions continued to support prices. WTI reached a seven-week high of $81.75 before closing near $80.52 on Friday.
BTC and ETH are declining today, with BTC currently hovering near a 6-week low of around $60,500. This drop comes as markets anticipate strong selling pressure from the news that crypto exchange Mt. Gox is set to return over 140,000 bitcoins—approximately $9 billion worth—to victims of the 2014 hack. This week’s agenda includes key events such as the US Q1 GDP revision and Nvidia’s shareholder meeting on Wednesday, followed by the PCE inflation report and the final estimate of US consumer sentiment for June on Friday. Headline and core inflation are both expected to be +2.6% yearly. Investors will also look forward to corporate earnings as Nike, FedEx, and Walgreens are set to report among others.
Client Profits
We consistently executed our trading strategy, capitalizing on price movements and outperforming the Altcoins market, where some large-cap alts have experienced significant declines since May (e.g., AVAX -60% INJ -50%, ADA -41%, since March, with heavy pullbacks in May). Although our recent trades have partially offset the gains achieved in May, we have strategically positioned ourselves to capture a short-term upward movement.
Currently, our market exposure stands at 40% of AUM, with the remainder held in cash. We anticipate volatility this week due to the latest PCE data and potential movements in US Treasuries, following Japan’s Norinchukin Bank’s announcement of its plans to liquidate its US Treasuries holdings in the coming months.
BTC
BTC wrapped up the past week with losses, hitting a 5-week low near $63,310 and marking a second consecutive week of losses despite the optimism coming from ETH. On Friday, BTC was trading near $64,100 down -2.9% over the week, bringing the year-to-date performance to +52%. Meanwhile, digital asset investment products experienced a second consecutive week of outflows, bringing the year-to-date total to $15.9 billion, according to CoinShares’ report ‘Digital Asset Fund Flows’.
On the daily chart, the price progressively traded lower in every session of the past week and continued to decline on Sunday before dropping heavily early this week and touching a low of $ 58,226 during Monday’s session. BTC is now facing $56,000 and $50,000 as the next support zones and could test its 200 MA, which is currently near $57,500.
BTC is potentially in a consolidation phase which could lead to a retest of the $50,000. On the upside, the $66,000 acts as the next resistance – see chart.
BTC’s 30-day Historical Volatility – HV- cooled to around 30% this week, from 36% last week.
After rounding up 2023 performance to +155%, BTC closed out January up +0.7%, February up +43.7%, and March +16.6%, BTC closed April down -15% and May +11%. As of June, the MTD is currently -11.8% with the YTD for 2024 being +41%.
ETH
ETH outperformed BTC last week and eked out some gains as price benefited from the SEC’s decision to drop its legal classification investigation into ETH as a security, thus confirming its status as a commodity and igniting a wave of optimism. ETH was trading near $3,515, up +1.0% over the week, bringing their year-to-date performances to +54%.
However, ETH dropped early this week, hitting a low near $3,230, and is currently trading near $3,300, still within its 8-month ascending range with the $3,200 and $3,000 zones serving as closest support levels. On the upside, the $4,000 zone acts as the next resistance.
ETH saw significant gains earlier this year, closing January up +0.05%, February up +46%, and March up +9.2%, but April experienced a notable decline of -17.4%. In May ETH gained +25%. As of June, the month-to-date performance stands at -14.9%, with a year-to-date increase of +40.2%.
Other markets
US equities rose this past week, despite a difficult end to the holiday-shortened week led by a relative pullback in tech stocks. The S&P and Nasdaq closed higher for the week, near 5,464 and 17,689 respectively, edging up +0.6% and +2.7%. Meanwhile, the VIX index inched higher to 13.2. Several factors may drive the market this coming week as PCE inflation data, GDP revisions, and Nvidia’s shareholder meeting are all set for later this week.
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%, March up +3.1% and +1.2%, April down -4.2% and – 4.4%, and May +3.5 and +6.9%, the MTD performances for June are currently of +3.2% and+4.5% with YTD performances of +14.2% and +16.6%.
DXY
DXY rose last week, benefitting from more dovish central bank measures and the political turmoil in France weighing on the Euro. On June 20, the Swiss National Bank cut rates for the second consecutive time, aligning with the BoC and ECB’s decisions to cut interest rates earlier this month. DXY rose in the latter part of the week to finish higher overall, hitting a high of 105.92 and closing near 105.83 on Friday.
The index confirmed above its 100-day and 200-day moving averages, around 104.5 and 104.6, respectively, and has been finding some resistance near 105.6 – serving as a 38.2% Fib retracement level.
DXY has been benefitting lately from robust inflation and job data along with a strengthening Dollar relative to other currencies, raising the prospect of a higher for longer rates scenario and validating the Fed’s intention to push back on potential rate cuts. This week’s PCE data could act as a catalyst for the index although the outlook for the index remains challenging as inflation pressure is still expected to cool down later in the year.
US Treasuries
US Treasury yields remained flat last week in the absence of major events, despite mixed economic signals from the expanding June Flash PMI and rising jobless claims. Much of the trading volume occurred amidst a “concession” rebalancing context ahead of this week’s $183 billion auction of two-, five-, and seven-year Treasury notes on June 25-27.
The yield on the 10-year note closed higher at 4.25%, while the 2-year note climbed to 4.74%. The odds of a 25bps rate cut in September increased to 61% from 45% a month ago, according to the CME FedWatch Tool.
The 10Y is currently trading near 4.23% while the 2Y yield is evolving near 4.72%, setting the inversion of the yield curve to 49 bps.
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