TA Tuesday: Mixed Macro Signals & ETF Optimism

Week-over-week performance:

  • BTCUSD: 42,761 / -1.52%
  • ETHUSD: 2,311 / +0.13%
  • US10Y: 4.14% / +10 bps
  • DXY: 104.27 / +0.71% (!)
  • GOLD (USD/OZ): 2,028 / -0.34%
  • NDX: 17,613 / +0.10%
  • VIX: 13.68 / +0.51%

On the macro side:
We are witnessing a mixed bag of data. 
While recent PCE figures hint at a softening in inflation (bullish), robust employment and increasing wages could potentially stoke inflationary pressures (bearish).

The unexpectedly strong US NFP report contributed to a rise in the US dollar and US yields, posing a challenge for non-interest-bearing assets such as bitcoin.
However, the coming weeks are light on significant economic data, which should support the momentum in risk assets.

My bias leans towards the current macroeconomic landscape remaining favourable (bullish), and I view any retracement, such as the one following the FOMC, as a good buying opportunity.

Looking ahead:

  • Wednesday, 7 February: CH Foreign Reserves (USD), US 10y Note Auction
  • Thursday, 8 February: US Jobless Claims, Fed’s Balance Sheet
  • Friday, 9 February: DE CPI

On the FX side: 
The FOMC press conference and the US NFP report ignited market activity, propelling the US dollar higher, with the DXY halted by a trend line.
As EURUSD heads towards 1.06 and USDCHF breaks the trend line at 0.867, the situation remains intense.

In my perspective, several key macro events will assist in forming a clearer outlook. 
I anticipate an increase in Switzerland’s USD foreign reserves, and I will be closely monitoring the Fed’s Balance sheet to gauge the severity of the debt situation.
Despite the volatility, I expect the current values to hold and stabilise, maintaining my bias towards a lower CHF.

Chart 1: DXY 1d

On the crypto side:
The headlines are dominated by ETFs, and the shift in ETF flow turning positive, coupled with a significant decrease in outflows from GBTC, is fostering a constructive and bullish overall price action.

As the market absorbs this ETF flow, short-term realised volatility is consolidating at below average values. 

With BTC 30-day realised volatility at 49% and BTC 30-day implied volatility at 39%, market participants anticipate this consolidation phase to persist.
Given the lightness of the macroeconomic landscape, I consider any potential flash-crash as a favourable buying opportunity, especially a downturn towards the $40K level.

Chart 2: BTCUSD 1d


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