Following last week’s sell-off driven by negative market sentiment and disappointing Non Farm Payrolls data, BTC bottomed at around USD 52,600 late Friday into Saturday, before rebounding to reach a weekly high just below USD 58,600 yesterday. This marks USD 58,600 as first resistance from where we can see a quick push to USD 59,500 (daily EMA 50 bands), on the downside first resistance is USD 57,200, USD 55,500 and then USD 53,600. My personal bias is that we see some further upside around the USD 60,000 level before we retest the USD 56,000 level.
ETH continues to lag behind BTC, with ETH/BTC maintaining its downtrend. I believe the 0.04 level will hold, but if it breaks, it will be interesting to watch the next move. I don’t see a clear resistance level below it, and it may trigger stops just beneath before recovering.
The 30-day BTC ATM implied volatility fell from 54% to 51% (-3% WoW), while ETH fell from 66% to 59% (-7% WoW). The 25-delta skew remains negative for ETH and BTC over all time frames up to 30 days, with a slightly higher positive skew for BTC over longer time frames.
Wednesday morning’s presidential debate showed that Democratic candidate Kamala Harris was able to withstand pressure from Republican rival Donald Trump, with Polymarket’s odds shifting slightly in her favour.
With US CPI coming in at 0.2% MoM and Core CPI slightly higher than expected (0.3% vs. 0.2% forecast), markets initially sold off, with BTC testing the USD 55,600 level. However, a strong rebound followed, signalling that markets are focusing on the job data rather than inflation.
Yesterday’s PPI data (0.2% vs. 0.1% expected) and Jobless Claims (230,000 vs. 227,000 expected) both exceeded forecasts. This shifted the odds for the Fed’s Interest Rate Decision next Thursday, raising the likelihood of a 50 bps rate cut from 14% on Wednesday to 43%, and a 25 bps cut currently at 57%. Risk assets rallied and Gold reached new all-time highs.
Next week is a busy one for the financial markets, starting with US Retail Sales on Tuesday, followed by the FOMC and Fed Interest Rate Decision as well as EUR CPI on Wednesday. Thursday brings the BoJ Interest Rate Decision and the Philadelphia Fed Manufacturing Index.
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