May has come out of the gate swinging. BTC has reclaimed USD 80,000, equities are stamping fresh all-time highs, and earnings season is on track for delivering the strongest outperformance rate in two decades. Risk appetite is back – and it is back loudly.
The mood music is geopolitical. Oil snapped below USD 100 earlier in the week on reports the US and Iran are closing in on a deal, with Washington tabling a one-page proposal to formally end the war and gradually reopen the Strait of Hormuz. The move is pure relief, nothing more. The harder questions – what a drawn-out or unresolved conflict would mean for broader energy markets and the trade routes – are being waved straight through.
NFP closes the week. Underneath the headline euphoria, though, the macro picture is more complicated than the price action suggests.
Macro: Equities Lead, Rates Disagree
The peace proposal could not have landed at a better moment for risk. Wall Street indices punched through to fresh records on the de-escalation read, helped along by a strong tech earnings run.
But the macro setup itself is anything but clean. Equities and crypto are leaning hard into the temporary-shock narrative. Rates markets are flatly refusing to play along. US yields and broader sovereign curves across other major economies remain elevated near multi-year highs; inflation expectations have crept higher, and oil – even after the pullback – is not exactly cheap. The cleanest read is that the equity and crypto bid is being driven by liquidity and earnings, not by any genuine repricing of the inflation path. That gap matters. If energy reasserts itself, real yields and the dollar grind higher in lockstep, and the relief trade unwinds quickly.
NFP today is the final piece of the labor data puzzle this week, following JOLTS, ISM Services and ADP, with consensus sitting at +62,000. A soft print keeps the soft-landing story alive; a hot one forces rates back into the conversation and tightens the runway for risk.
Crypto: Wider Bid, Quieter Conviction
BTC is up 4.3% on the week, having reclaimed USD 80,000 for the first time since January 31 and pushed above USD 82,000 mid-week before slipping back below that level – but the broader uptrend remains intact. The break above USD 80,000 was the structural shift. USD 82,800 now sits as short-term resistance, and a clean reclaim opens a fast path to USD 84,000 with little in the way until you get there.
What stands out is BTC’s resilience through the noise this week. Strategy paused purchases and floated potential BTC sales to fund dividend distributions, yet the rally held firm into mid-week. For weeks, much of the bid had been attributed to Saylor’s accumulation alone; this week’s price action suggests a wider base of support is now doing the work. ETF flows reinforce that read, broadly extending the positive momentum we have seen since the start of May – and we expect that to continue. Yesterday’s USD 268.5 million outflow did snap a five-day inflow streak, but the broader picture still leans constructive after USD 1.7 billion of inflows over the past week.
Elsewhere in the broader crypto space, TON is up +100% on the week after Pavel Durov announced that Telegram itself is stepping in as the main driver of the TON network, taking over as its largest validator from the TON Foundation. ZEC rallied +62.5% on a major fund disclosure and founder-led accumulation, and high-beta AI names are back in the conversation as AI remains the primary pull-on liquidity down the risk curve. ETH and the broader alt complex continue to lag without a clear catalyst.
The setup still leaves room for BTC test USD 84,000-85,000 in the near-term. That is where concentrated short interest is parked, and the level where a squeeze starts feeding on itself. Our base case has not shifted. Peak uncertainty is behind us but conviction needs one of the live catalysts to land cleanly before the market is willing to price it.
Looking Ahead: The Deal, the Data, the Breather
NFP today is the immediate read. Beyond that, three threads drive price action into next week. The first question is whether the one-page peace proposal evolves from political optics into a signed agreement. If the Project Freedom pause turns into a credible end-of-war framework, the relief trade likely extends further. Middle East noise is likely to bleed into the weekend regardless, with the most recent fire exchange between US and Iranian forces a reminder that the ceasefire is holding more in name than in practice. Second, the Clarity Act, which has the potential to redirect institutional flows if it lands cleanly. Third, on the macro side: oil holding sub-USD 100, and whether US and global yields keep grinding higher.
Fed pricing remains the quieter story. The curve has started leaning the other way, with December now putting the probability of a 25bp hike at 16.2%. It is not the base case, but it is no longer a tail either, and that asymmetry matters for every rates-sensitive corner of the book.
Equities are running hot into a market that has already given the market its earnings dopamine. A breather here would be healthy. Whether the market gets one is another question.
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