TA Tuesday: Crypto Consolidation Amid Economic Events

Week-over-week performance:

  • BTCUSD: 61,535 / -3.04%
  • ETHUSD: 2,889 / -5.8%
  • US10Y: 4.49% / +2 bps
  • DXY: 105.26 / +0.07%
  • GOLD (USD/OZ): 2,341 / +0.82%
  • SPX: 5,221 / +0.8%
  • NDX: 18,198 / +0.58%
  • DVOL: 56.51 / +2.1%
  • VIX: 13.59 / +0.81%

Looking ahead – Economic Calendar

  • Tuesday, 14 May: US PPI, Fed Chair Powell Speaks
  • Wednesday, 15 May: US CPI, US Retail Sales
  • Thursday, 16 May: US Jobless Claims
  • Friday, 17 May: EU CPI

On the macro side:

Last week went smoothly with a modest economic schedule, and we witnessed the familiar bullish trend in most markets, with the exception of crypto.

However, the week ahead promises a flurry of significant macroeconomic events. Currently, market participants continue to expect a 50 bps rate cut by the end of the year.

Consequently, the focus will be on this week’s economic releases and speeches from Federal Reserve members, as they are likely to strongly influence the market’s direction.

Chart 1: Fed target rate probabilities

On the FX side:

The USD is consolidating its gains, driven by an uptrend in longer-term rates.
With such a busy week ahead, I am opting to adopt a neutral position, in line with my long-standing bias towards the CHF as the funding currency.

Chart 2: DXY 1d

On the crypto side:

Crypto is consolidating lower due to the lack of positive idiosyncratic events and the divergence from traditional risk assets.

While I remain structurally bullish on BTC into year-end (macro + crypto narratives), short-term upside looks limited, and the market lacks a quick bid to the lows.

Weekly implied volatility is trading at 52% (9v above realised), and whether this is the median value for the year (both in terms of IV and in terms of VRP), this year volatility has been on a high regime, so I think the current volatility is still particularly rich and I will sell volatility here to accumulate BTC.

Also noteworthy is the unusual lack of leverage, or rather the prevalence of short positions, in BTC and similar assets. Global open interest remains stable, and the almost negligible adjusted premium in perpetual contracts suggests that market sentiment is short.

Given these factors, the ongoing consolidation is structurally bullish for me. However, I remain prepared for a potential downturn towards USD 56,000, with the upside capped at USD 67,000.

Chart 3: BTCUSD 1d

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