Last Week’s Recap:
- U.S. PCE rose 0.4% MoM in April v.s. expected 0.3%, and 4.7% YoY v.s. expected 4.6%.
- Biden and McCarthy reached the final debt ceiling deal, waiting for Congress to approve.
- MakerDAO got a proposal to raise the DAI Savings Rate to 3.33%.
- Tornado Cash got a governance proposal attack and lost 483,000 TORN.
- Paradigm expanded its crypto-only focus to “frontier” technologies such as AI.
Legacy Markets – DXY
DXY continued moving up with higher-than-expected PCE readings and may continue the trend until June FOMC, as the market is focusing on sticky inflation again. 106 remains as short-term resistance, and we will likely see crypto and U.S. equities move higher once DXY fails to break this level.
Legacy Markets – VIX
VIX erased short-term gain after the debt ceiling deal is reached, in general, it still stays at a relatively low level.
BTC Weekly View
BTC has been responding to the debt ceiling issue quickly and strongly and has been holding well above 27K support. It’s likely that the market needs more time before BTC can test the next resistance at 30K as the market focus is shifted back to inflation, and the Fed remark in June FOMC will likely drive the movement.
ETH Weekly View
ETH has successfully established 1.8k as short-term support and has been moving in parallel with macro events. 2K remain as short-term resistance unless the inflation picture becomes better. With LSD-related narratives on ETH, we expect a large upside potential for ETH.
ETH/BTC started moving slightly higher but still mainly stayed within the range as both BTC and ETC have been macro-driven recently.
TOTAL2 – USD Market Strength
TOTAL2 is grinding higher but still lacks liquidities as only some leading altcoins moved together with major coins. We expect the altcoin market to continue under pressure until majors further break higher.
TOTAL2BTC – BTC Market Strength
TOTAL2/BTC will be likely still under pressure as BTC is responding faster than recent macro events, and TOTAL2 will still be struggling with liquidity issues.
- Market especially majors got quite a recovery rally after the debt ceiling issue is solved, and the market focus shifted back to inflation and FOMC. May’s inflation reading will be the next main driver.
- Altcoin land remained low liquidities, but some leading tokens have been responding to the macro event as well
- NFTs continue picking up strength and more NFT lending marketplaces (such as BLUR’s BLEND ) continue gaining volume
- Crypto options update:
- ETH 30-day 25 delta R/R range bound around the neutral level (+/-5) over the past month.
- ETH 30-day ATM vol continued suppression keeping us on the sidelines for DOV-related trades.
- Some low IV fills in ETH Jun30 call expiries, starting to take profit on crypto pop-off US debt ceiling developments.
The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell any digital assets or other financial products
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