TA Tuesday: BTC consolidation, XRP ruling, and altcoin opportunities

Week-over-week performance:

  • BTCUSD: 30,045, -1.39%
  • ETHUSD: 1,906, +1.44%
  • US02Y: 4.73%, -12bps
  • DXY: 99.82, -1.93%
  • GOLD (USD/OZ): 1,958, +1.56%
  • NDX: 15,713, +4.44%
  • VIX: 13.5, -10%
On the macro side:
Last week, the US CPI showed positive signs for risk assets, as we observed higher low-cash/intensive R&D equities, a weaker dollar, and a soft VIX.
However, when it comes to digital assets, as we have mentioned numerous times in the past year, while a weaker US dollar has supported price increases, market uncertainty is hindering crypto assets (which have low Free Cash Flow and are R&D intensive) from participating fully in the tech equities rally.

Looking ahead:
The macroeconomic schedule is set to remain relatively calm until the upcoming FOMC decision on July 27th. There is already widespread anticipation of a 25 basis point rate hike at that meeting, and we don’t foresee any significant events on the horizon that could greatly impact the market until at least mid-late August.

On the crypto side:

Last week was eventful and brought significant news.

The recent SEC ruling on XRP has left our desk puzzled and concerned.
The decision categorised selling XRP through OTC offerings to institutional investors as a securities offering due to investment contracts.
Then again, selling XRP on exchanges to retail investors without disclosures was not considered a securities offering. While some celebrate this as a victory against securities laws, we fear it may encourage bad token projects to flood exchanges and potentially turn crypto assets into speculative assets rather than creating value and utility to Institutions and Individuals.
This could result in increased volatility and unpredictability in the altcoin market.

Having said that, the ruling does benefit crypto exchanges, particularly Coinbase, as it removes regulatory uncertainties and may drive prices higher in the short term.
But for Bitcoin, it has a negative effect, reducing its appeal as an alternative asset and potentially leading to lower dominance (currently: 50%)

Considering the current summer seasonality with low volatility and broader consolidation, I favour a riskier portfolio with rotation from bitcoin to altcoins that missed the XRP pump.

My bias towards bitcoin remains the same, with a general consolidation in the lower $30k range, preferring an entry point around $28.7k and targeting $32.3k by the end of the summer.

In the options market, I still prefer writing $32k calls and buying $29k puts, as the risk-reversal is leaning towards the calls side of the smile, and the volatility structure remains relatively flat in the 40s.

Chart 1: BTCUSD 1w

Regarding altcoins, I have a positive outlook for projects such as $CHZ and $RNDR.

For RNDR, the current symmetrical triangle suggests that an upward break could push the price towards my targets at $2.4 (TP1) and $2.6 (TP2), while a downside break might see a retest of the $1.6 area.

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