Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good morning!
Bitcoin (BTC) and Ethereum (ETH) are up +1.7% and +2.5% on the week. Economic data coupled with crypto prices are still in wait-and-see mode.
- BTC/USD: 27,793, +1.45%
- ETH/USD: 1,898, +2.04%
- US02Y: 4.57%, +23bps
- DXY: 104.3, +1%
- GOLD (USD/OZ): 1,939, -1.12%
- NDX: 14,298, +3.24 %
- VIX: 17.94, +4.3%
- VVIX: 97.57, -0.07%
Macroeconomic developments
The latest data on the PCE index exceeded expectations. Core PCE increased by 4.7% YoY, compared to 4.6% YoY in March. Taking into account this new information along with the release of the FOMC minutes last Wednesday, which revealed a division among Fed members regarding future rate hikes, it looks like we are in for another rate hike. As the 2y yield inched higher, the Fed futures are now split 60% for a 25 bps hike and 40% for a no-rate hike. The upcoming employment numbers (coming on Friday) are likely to have a significant impact if they deviate from the consensus.
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Crypto market recovers to some extent
Debt ceiling developments created some spot movements, with BTC 7-day realised volatility sitting at 41% at 1y median values, we are closing the gap with ATM Implied Volatility. Should crypto lag the TradFi markets, we are in for a rally here. Chart-wise, in my opinion, it looks like we have to retouch the 25k mark before any other bullish breakout. With the RSI at 53, I am still in a wait-and-see approach.
ETH/USD has been unable to break through the trendline and is still trading in a tight range. Given all the positive narratives regarding the Ethereum network (i.e. ETH staked at all-time-high) and with ETH/BTC at 0.06834, I still believe there is potential for ETH - and alts, outperformance.
Happy Trading!
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