Market

It’s the last day of May. Contrary to the “Sell in May and Go Away”, BTC rose 20% in May.

So far the market has been moving sideways within a simple range. There is no clear direction. BTC continues to see resistance between 69k and 70k. The main point of interest I see is whether BTC can close the May monthly candle above $69,000. I consider that a positive sign. Below $65,000 it is negative and above $65,000 it remains bullish. If the PCE data is not good for the market, we are likely to see a few more weeks of sideways trading.

If BTC really wants to continue its upward movement… I think I should start in a few days. Up/down… There will soon be movement in either direction.

From an order book perspective… There are still many sell orders above $70,000. Coinbase has also recently seen many sell orders at high prices, similar to Binance. The purple class continues to buy, but strong spot buying is still needed to break the range. Currently, CBP remains negative and buying momentum is weakening.

Vol remains low as the market remains in a range flat with no overall movement. The options market appears to be showing a bearish/hedging movement against market weakness. Put skew has risen.

ES showed a bearish move during the week. As mentioned in last week’s article, the overall market situation is unstable. Since BTC remains highly correlated with TradFi, I expect it will still have a good chance of following the ES move. My personal expectation is that the downside may continue a little longer, but I think the downside move will end soon and the market will bounce back. 1H/4H bullish divergence, 1D RSI 50.

PCE data will drive actual movement.

DXY & Yield led the bearish move in risk assets this week. It is very difficult to predict the direction of exchange rates. DXY is showing a strong performance, and there may be many reasons, but the imminent interest rate cut in European countries also seems to have had an impact. Yield is still very unstable… Demand is weak compared to Treasury issuance. Yield is expected to continue to be unstable in June.

Additionally, Treasury bond buybacks are not positive news that will impact risky assets. There will be no effect on risky assets… Please refer to the article below.

Chang’s Thought（2024.05.03）: The Storm Has Mostly Passed – Coincall Academy

ETH ETF

The SEC has requested S-1 updates from ETF issuers by Friday. These SEC moves are positive and seem to indicate that ETF approval is imminent. Actual trading is expected in July. I still don’t know how much demand there will be on TradFi for the ETH ETF, but the ETF approval itself is definitely positive.

Politics & Crypto

Crypto is clearly a very big issue in this US presidential election. Biden faced significant backlash from crypto supporters after saying he would veto FIT21. As a result, I reversed my negative opinion a few days later. He is now seeking crypto-related advice. There will be a lot of political news in the future. They will do anything to win the election.

I am very optimistic about this whole situation. Crypto is clearly gaining traction.

PCE

The most important main event of the day is PCE. The data the Fed loves. The 2% inflation target they talk about is PCE, not CPI. Current headline expectations are 2.6% and core is 2.75%. Both MoM and YoY are expected to be cooler than before.

Wage growth is retreating, according to data released by the Richmond Fed… The impact of wages on the CPI is still expected to decline. I expect today’s PCE to cool. This view can be found in the CPI analysis article written on the 14th. Reinflation is still not visible.

If the PCE data is higher than expected, which is bad for the market… People will not buy risky assets. Markets are likely to be bearish until the FOMC in June.

Chang’s Thought（2024.05.14）：Disinflation vs Reinflation – Coincall Academy

GDP & US Economy

Macro data released yesterday shows the US economy is retreating “slightly.”

  • GDP: In line with consensus, but the revised value is lower than before, showing that the economy is “slightly” retreating.
  • Jobless Claims: Little change in data and no impact on the market

Consumption has slowed, resulting in lower GDP figures. Yesterday’s market action shows that Bad is not Good. In other words, people’s interest is still growth & inflation and they are focusing on the changing trends that indicate economic growth is retreating. This is the moment when today’s PCE data becomes important. (Regarding stagflation)

EU

S&P Global PMI™ on Twitter / X

  1. Manufacturing is close to stabilizing, with the smallest decline in 14 months. The service sector continues to drive the upturn, sustaining growth at the fastest rate in a year.
  2. Employment gains sustain the upturn, with job creation at an 11-month high. The service sector saw further job gains, while job losses in manufacturing eased to the lowest in eight months. Positive implications for job security and consumer spending.
  3. Price pressures cooled in the euro area, with service sector inflation down to joint-lowest in three years. A slower rise in average prices for goods and services signals inflation meeting the European Central Bank’s 2% target.

According to data released by S&P Global, the likelihood of a recession in the EU appears to have decreased.

Bright Future

Mastercard just launched Crypto Credential, which allows you to send cryptocurrency to any customer at an exchange with a simple username, instead of a wallet address.

PayPal USD(PYUSD) has launched on SOLANA

The New York Stock Exchange Announces Collaboration with CoinDesk Indices to Launch Financial Products Tracking Spot Bitcoin Prices

BlackRock Reports BTC Exposure

  1. Strategic Global Bond Fund
  2. Strategic Income Opportunities Portfolio

Semler Scientific adopts Bitcoin as primary treasury reserve asset

Metaplanet directors authorize purchase of additional ¥250 million of BTC

NFA DYOR 🙂

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