TA Tuesday: Bullish trends in crypto and traditional assets

Good Morning from Crypto Finance,

Week-over-week performance:

  • BTCUSD: 70,870 / +10.58%
  • ETHUSD: 3,653 / +9.43%
  • US10Y: 4.25% / -7bps
  • DXY: 104.12 / +0.34%
  • GOLD (USD/OZ): 2,170 / 0.60%
  • NDX: 18,277 / +1.62%
  • VIX: 13.12 / -9.58%

On the macro side:

Last week’s interest rate decisions by the major central banks lead me to the following conclusions:

  1. There is little concern about a resurgence of inflation.
  2. Central banks are inclined to lower rates, although perhaps not as quickly as some might hope. They are, however, expected to steadily move towards their targets.

Overall, the macroeconomic landscape continues to favour risk assets, with a relatively quiet week in terms of macroeconomic developments adding further support to the market’s uptrend.

Looking ahead:

  • Thursday, 28 March: US GDP, US Jobless Claims
  • Friday, 2 March9: US PCE

On the FX side:

The much-anticipated rate cut by the Swiss National Bank (SNB) finally took place, sending the EURCHF above 0.97 and the USDCHF above 0.89.

Given the European Central Bank’s (ECB) tendency to lag behind in monetary decisions, I expect the EURCHF to move back towards parity.

As for the US Dollar Index (DXY), the target of 104 and the formation of a rounding top at 104.5 imply a possible retest of the trendline at 103.

Overall, I continue to favour borrowing CHF.

Chart 1: DXY 1d

On the crypto side:

The notably dovish and optimistic stance of the FOMC/Fed, coupled with various crypto-specific developments such as the LSE’s plan to trade crypto ETNs, the surprising demand for BTC ETFs from banks, the ETH Dencun upgrade, and the frenzy surrounding Solana, among others, are fuelling a robust upward momentum, with BTC reclaiming the USD 70,000 mark.

Historical lows in bitcoin continue to be aggressively bought in both the spot and derivatives markets, where elevated volatility persists and the skew remains tilted to the upside.

The retest of the previous all-time high around USD 74,000 signals significant activity and we could expect some selling pressure from both short-term profit-taking and long-term holders looking to capitalise.

Nevertheless, in this bullish macroeconomic and crypto landscape, the strategy of buying on dips and selling on previous highs continues to prove effective.

Chart 2: BTCUSD 1d

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