TA Tuesday: Crypto Markets Weather Volatility, Market Expectations, and Year-End Strategies

Week-over-week performance:

  • BTCUSD: 41,522/ +12%
  • ETHUSD: 2,209 / +9.96%
  • US10Y: 4.23% / -16 bps
  • DXY: 103.60 / +0.34%
  • GOLD (USD/OZ): 2,033 / +0.89%
  • NDX: 15,839 / -0.76%
  • VIX: 13.09 / +3.23%

On the macro side:

Macro data from last week keeps suggesting the possibility of a soft landing.
Consequently, we continue to observe a gradual decline in long-term yields both in the US and the EU.

If this trend persists and economic indicators remain consistent or surpass expectations, it is likely that we will see a continuation of lower yields and an upward trajectory for risk assets.

Chart 1: Gov Yields YTD

Looking ahead:

  • Tuesday, December 5: US JOLTs
  • Wednesday, December 6: US ADP Nonfarm Employment Change
  • Thursday, December 7: US jobless claims
  • Friday, December 8: DE CPI, US NFP

On the FX side:

With all the macro news we had last week, the action has been notably volatile.
Nevertheless, DXY has once again reached the 103 threshold.
As DXY consolidates at these levels, crypto and risk assets should benefit.

Chart 2: DXY 1d

On the crypto space:

November wrapped up with a 12-month high in trading volume, marking an overall positive performance.
BTC soared past 40k, ushering in December on a high note.
Briefly touching 42k, BTC hit its highest point since April 2022.

Following weeks of intense focus on alternative coins, major cryptocurrencies made a robust comeback.
BTC now commands a dominance of 54.3% and our desk has observed clients actively expressing their bullish sentiments, strategically positioning themselves in BTC, ETH, as well as in altcoins such as LTC, which seems to be lagging.

Determining whether this is a local peak remains challenging, but the prevailing sentiment remains positive.
Futures basis, open interest, and volatility surface suggest a bias towards another high.

Considering the total crypto market cap, holding at $1.48 trillion could signal a retest of $1.64 trillion (a 10% increase from the current level).
Conversely, a dip below might lead to a retest at $1.35 trillion (an 8.78% decrease from the current value).

Chart 3: Crypto Total Market Cap 1d

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