TA Tuesday: Digital assets continue showing strength in contrast to the macro market

Digital assets continue showing strength, despite yields, FX, Gold, and flat US Tech Equities.

Week over week performance:

  • BTCUSD: 25,043, +15.64%
  • ETHUSD: 1,706, +14.27%
  • US02Y: 4.675%, +23 pcts
  • DXY: 104.03, +1.07%
  • GOLD (USD/OZ): 1,832, -2.53%
  • NDX: 12,358, -1.13%
  • VIX: 21.93, +20.8%
  • VVIX: 87.9, -6.37%

The major question currently being asked at our desk is: “How long can digital assets hold this path of their own on the upside?”

Traditional markets are now “almost” aligned: treasuries are back on the policy rates, the US dollar is showing strength (not as much as I would have expected), gold is trending down, and US tech equities are flat.

I believe that – soon – digital assets, despite having been particularly oversold in 2022, will align with the overall market picture.

In terms of BTCUSD, I keep seeing $25.2k as the major resistance and $22k as the support. Derivatives dealers continue being short gamma (i.e. short volatility), so that a break of $25.5k will easily push the price to $30k.

Volatility Risk Premia are tiny, and the overall ATM volatility term-structure is almost flat, so that I see little reason to short volatility at this stage. I would better go long volatility, and bet on a breakout.

In alts, we are seeing flow in both profit taking and “betting on the catch up.” The theme of the year so far is buying the underperformer of every sub-category and waiting for the catch-up (think of L1s, L2s, and DeFi).

We at Crypto Finance AG offer cross trading of nearly all pairs, so do not hesitate to reach out to us if you want to do a catch-up trade.

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