TA Tuesday: Bullish momentum in equities and altcoins

Week-over-week performance:

•  BTCUSD: 31,069, +2.59%
•  ETHUSD: 1,954, +4.83%
•  US02Y: 4.94%, +24bps
•  DXY: 103.05, +0.43%
•  GOLD (USD/OZ): 1,924, -0.05%
•  NDX: 15,208, +3.53%
•  VIX: 13.56, -4.78%

On the macro side: This week will be shorter due to the 4th of July holiday, but the NFP report on Friday will be significant for the markets. The Fed’s decision to hold rates in June was a cautious move; strong employment data would further support a more aggressive approach from the Fed. The stock markets are approaching 2022 highs, as the general uncertainty is low as reflected from the VIX and as we approach the summer season. Similarly, the crypto market is experiencing a positive trend, fueled by encouraging news from the institutional sector. This has contributed to the momentum in crypto. My bias remains the same: if digital assets find favourable conditions, they will follow the path of equities, and equities are simply rallying. On the crypto side: Based on the BTCUSD 1d chart, it appears that momentum is reaching its peak as the RSI once again rises above 60. Additionally, we are approaching the upper limit of a key resistance band at $31.5K. Considering these factors, it would not be surprising to see a period of consolidation within the lower range of around $30K as we head into the summer season. Chart 1: BTCUSD 1d  On the derivatives side, traders are positioning themselves for strong bullish movements, indicated by significantly higher premia for OTM calls compared to OTM puts (e.g., BTC 30-day 10D RR: 8.6%). Furthermore, we are currently in the bottom 10% of all historical observations for 25D skews. Although ETH front-end volatility has increased relative to BTC, the relative term structure between ETH and BTC remains in backwardation for maturities longer than 60 days, and risk-reversals are stronger for bitcoin. This suggests that the market is anticipating a crypto rally led by BTC first, followed by ETH and other altcoins. One trade setup that I find favourable at the moment is selling 30-day 25D calls. This strategy would allow you to benefit from both the summer effects (lower vol) and the high call premia while maintaining a net-bullish position. Now, moving on to altcoins: Chiliz ($CHZ) has caught my attention. Although the token has lost some of its allure after being extensively discussed in the media and on Crypto Twitter, it continues to make progress as a project. Looking at the chart, it has been steadily recovering from its June low, which coincided with the March ’21 level before the bull market began (a strong support level). The RSI shows a bullish divergence with the SMA, which could help sustain momentum despite the 30-day realised volatility sitting at 105% (above the 1-year median). Considering the Dec-Jul VRVP, I would set my trading targets for a long entry as follows:

• Entry: below $0.079
• Take profit 1: $0.1
• Take profit 2: $0.12
• Stop loss: $0.071

Here is the chart for reference: Read more News here