TA Tuesday: ETH and BTC Lead the Charge with Double-Digit Gains

Week-over-week performance:

  • BTCUSD: 71,206 / +15.71% (!)
  • ETHUSD: 3,675 / +27.20% (!!)
  • US10Y: 4.44% / -5 bps
  • DXY: 104.58 / -0.65%
  • GOLD (USD/OZ): 2,415 / +3.16% (!)
  • SPX: 5,308 / +1.67%
  • NDX: 18,674 / +2.62%
  • DVOL: 59.08 / +4.55%
  • VIX: 12.14 / -10.66%

Looking ahead – Economic Calendar

  • Wednesday, 22 May: UK CPI, FOMC minutes
  • Thursday, 23 May: US Jobs, US PMI, Fed Governor speaks
  • Friday, 24 May: Durable Goods, Fed Governor speaks

On the macro side:

Last week, the US CPI matched expectations, showing a year-over-year increase of 3.4%. This triggered a breakout in risk assets, with major US indices reaching all-time highs and the VIX remaining low. Despite this, the Federal Reserve’s policy rate target for the end of the year remains unchanged from the previous week, influenced by Powell’s “higher for longer” stance. Given a relatively quiet week ahead in terms of macroeconomic news affecting risk assets, I anticipate this trend to continue.

Chart 1: US CPI YoY

On the FX side:

The DXY retested the 104.27 level, with short-term resistance at 105. 
EUR/USD is hovering around 1.09, which serves as a resistance level. 
In EUR/CHF, the euro finally broke above 0.9824, and I am still in for parity.

Chart 2: DXY 1d

On the crypto side:

Last week, there was a notable absence of narratives driving price consolidation. While the CPI report was positive for bitcoin, other digital assets had to wait until yesterday to see gains.

Unconfirmed rumours about the SEC potentially reversing its stance on ETH ETF approval have led Bloomberg commentators to increase the odds of approval this week to 75%. Exchanges are being asked to update their 19-4b filings on an accelerated basis, suggesting that approval is imminent. The first round of Spot ETH ETF deadlines is approaching this week: VanEck on 23 May, and Ark Invest/21Shares on 24 May.

As a result, ETH/BTC has risen from the graveyard to over 0.052 but was rejected at the 30-day moving average of 0.05273. ETH has successfully defended the USD 2,900 level multiple times, which serves as solid support. The market appears unprepared for an ETH approval based on perpetual leverage and options skew. Therefore, an approval could easily push ETH back to recent highs above USD 4,000 and potentially up to USD 5,000 shortly thereafter. During the ETH rally, names like ENS, LIDO, ENA, and PENDLE have outperformed.

Additionally, this week’s FIT21 vote could be another significant catalyst, as it aims to establish a US regulatory regime for digital assets. For bitcoin, the USD 73,000-74,000 range remains a heavy resistance, with USD 67,200 as a solid support level.

Chart 3: BTCUSD 1d

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