Market
1. BTC fell from $73,800 to $60,800 during the week. The downtrend is continuing stronger than expected without a rebound. The current market situation is very chaotic. People also ask for 40k. Personally, I am thinking of the levels shown on the chart. It is not much different from existing thoughts. Important level: 61-59k (20%) / 54-55k / 51-52k (30%) It is possible that BTC could fall further to 52k due to FOMC or other events, but it would be a blessing if we get it. I think the next 1-2 weeks will be a good shopping period.
2. From an order book perspective, BTC appears to be near the bottom. Binance Spot and Binance Futures, which have the highest trading volume and have the most influence on price changes, have quite a few buy orders at the 58k level. If BTC gets there, the reaction at that level will be important to watch. The current decline is being driven mostly by futures trading.
3. For ETH, people’s sentiment has clearly turned bearish, with the probability of ETF approval in May approaching 0. But today BlackRock launched a fund on the ETH chain. There is no reaction to this news as the market conditions are very bearish at the moment, but I think it is definitely positive news for ETH. ETF approval in May is clearly likely to be delayed, but July is starting to look promising.
4. USDT.D rebounded from the 3.7-3.8% level. I thought it would stay around this level and today it reached the first resistance of 4.7%. Honestly, I think 4.7%-5% is the high point for USDT.D, but if BTC falls further, it may exceed 5%. This will become clearer over time as BTC has not had enough time to structure a trend reversal.
5. The current upward movement seems to be slowing, and if SPX fails to continue the trend movement by breaking 5200, the stock market is likely to decline starting next week after the FOMC. If nothing special happens at the FOMC, there is a possibility that it will continue to rise, but if a decline occurs, it will likely be at the 4950-4850 level.
6. DXY continues to rise. As mentioned in last week’s analysis, I do not think that the DXY rise is a good situation for risky assets in the current situation. A break above the trend line could lead to continued DXY strength and risk assets would like to see a bearish reversal at 104.5-105. One thing is clear: DXY rising does not mean BTC will fall in a straight line.
7. 10Y is resting at the 4.3% level. This level has been resisted several times in the past. A reversal would be ideal, but everyone is waiting for the FOMC.
Keep in mind. We don’t know exactly where the bottom is. If BTC reaches the level you want, I think it makes sense to buy in installments. Everyone’s desired level will be different. Every drop is an opportunity.
ETF Flow
ETF inflows this week are showing very negative results. Following Fidelity’s lowest inflows, ARK’s inflows are close to $0, and BlackRock’s inflows are also decreasing. As a result, we are unable to digest the GBTC leak. These psychological concerns have clearly taken hold in the markets. Last week I mentioned how ETFs work in the market.
For the first time, ETF demand is starting to decline. As I mentioned last week, spotting and understanding these trend changes is important. I will be watching closely to see if there are direct outflows from other ETFs except GBTC. Depending on whether such a phenomenon occurs, we will be able to accurately determine whether current ETF buyers are long-term holders or speculators.
What we need to know for sure is that TradFi is sensitive to macro changes. The BTC ETF will continue to face this situation in the future, regardless of price changes.
Options Market
As mentioned last week, ETH’s put option demand has clearly increased, and its price has fallen 25% from its peak. This is the largest decline in the past year. The range of movement has widened and Vol is also higher again compared to BTC, up 12 points. It is natural that demand for put options increases in a chaotic macro environment like this week.
There was a lot of selling of the March 3250-3200 put option, but today someone bought the April 3200 ATM put option at a $2.5M premium. It’s a complicated mix of emotions.
The 70-80 Vol environment continues to persist. Market participants set a wide range of daily movements. The current high Vol environment appears to be influenced by the FOMC and several macro events, the halving, and the end of the month. Long-term exp options remain consistently in demand. Market participants are betting that BTC will rise in the long term.
Apparently, several traders have been buying BTC puts over the past two weeks. Put options are great protection against downsides that can occur in uncertain and confusing situations. It is especially efficient when it is cheaper than a call option.
Macro
FOMC DAY!
The most important part of the FOMC this quarter is the dot plot. The market is expecting three interest rate cuts this year, and people will focus on interpreting the Fed’s thoughts on interest rate cuts. If a special variable occurs in this FOMC, it is likely to be a dot plot. Additionally, the market is concerned about the recent rise in prices such as CPI/PPI. After the significant decline in CPI over the past year, it is actually difficult for CPI to fall sharply anymore. The question is whether it stays low or rises again.
The Fed will continue to talk about its 2% inflation target (Always repeating). Therefore, we will be cautious about inflation, which has recently shown signs of rising again, and there is a possibility that the Federal Reserve’s comments on the issue will be hawkish.
Have a great week everyone!
NFA DYOR 🙂
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