Week-over-week performance:
- BTCUSD: 109,414 / 3.72%
- ETHUSD: 2,601 / 2.6%
- US10Y: 4.45 / 0bps
- DXY: 99 / -1%
- GOLD (USD/OZ): 3,214 / -1.2%
- SPX: 5,802 / -2.68%
- NDX: 20,915 / -2.48%
- VIX: 20.32 / 1.06%
Looking ahead – economic calendar:
- Tuesday, 27 May 2025: US Durable Goods Orders, Bitcoin Conference 2025 (1/3).
- Wednesday, 28 May 2025: OPEC meeting, FOMC Minutes, Bitcoin Conference 2025 (2/3), NVDA Earnings.
- Thursday, 29 May 2025: US GDP Q1, US Initial Jobless Claims, Bitcoin Conference 2025 (3/3).
- Friday, 30 May 2025: US Core PCE Price Index (Apr), UMich 5Y Inflation Expectations (May), UMich Consumer Sentiment (May), FTX repayment disbursement.
- Saturday 31 May 2025: NBS Manufacturing PMI.
On the macro side:
Over the past week, global markets were driven by a mix of bond market volatility, shifting FX dynamics, and renewed trade tensions. A weak 20-year JGB auction in Japan kicked off the turbulence, with the bid-to-cover ratio dropping beneath historical averages. This pushed long-end yields sharply higher—30-year JGBs hit a record 3.185%, and 40-year yields climbed to 3.635%—raising concerns that Japanese investors may repatriate capital, pressuring foreign bond markets, including US Treasuries.
This narrative extended to the US when Wednesday’s 20-year Treasury auction tailed significantly, clearing at 5.047% versus 4.81% the prior month, amplifying duration concerns and fiscal anxieties. The resulting move steepened the US Treasury yield curve as long-end yields spiked in tandem with Japanese rates. Meanwhile, the US dollar index (DXY) fell to its lowest level since 2022, driven by narrowing global rate differentials and dovish expectations following weak PMI data and declining core PCE inflation. Despite rising US yields, capital outflows and diminished carry appeal—due to tighter yield spreads abroad—drove dollar weakness.
To close the week, geopolitical risk resurfaced after President Trump proposed a 50% tariff on EU imports, triggering a sell-off in equities. Markets stabilised slightly after reports indicated a potential delay in tariff enforcement until 9 July, leaving room for diplomatic negotiations.
Chart 1: DXY response to US and Japanese long-term yield spikes.
On the crypto side:
Over the past week, despite macroeconomic disruptions, bitcoin (BTC) has demonstrated significant strength, reaching a new all-time-high (ATH) of USD 111,816 on 22 May 2025. This upward momentum has been bolstered by favourable US regulatory developments and increased institutional participation, including JPMorgan Chase’s announcement to permit clients to purchase bitcoin.
Bitcoin’s derivatives market is reinforcing the current bullish momentum, with both options and futures open interest reaching all-time highs. Options open interest has surged to a record USD 48 billion, driven by heavy activity in USD 120,000 and USD 130,000 call strikes for May and June expiries—highlighting strong directional conviction towards continued upside. Simultaneously, futures open interest has climbed to USD 150 billion, accompanied by daily volumes near USD 350 billion. The alignment of rising open interest, upward spot momentum, and skewed call demand underscores market expectations of a sustained rally.
From a technical analysis perspective, bitcoin’s price action is currently consolidating just below a clear resistance at USD 112,000. This level has acted as a ceiling since the recent ATH and aligns with elevated gamma exposure in the options market, marking it as a key inflection point. A decisive breakout above USD 112,000 in the near term could propel BTC towards the next resistance zone around USD 120,000, which also coincides with the most actively traded call option strikes. However, if price fails to reclaim USD 112,000 promptly, a brief mean reversion towards the USD 107,000–USD 105,000 region is likely, serving to reset short-term positioning and rebuild bullish momentum before another leg higher.
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