Bitcoin rallies off ~$30k support again; crypto outlook remains choppy for now; macro picture softening; Delta variant may help alleviate a key risk for crypto (Fed tapering); Fidelity institutional survey highlights the big picture opportunity
Bitcoin rallies off ~$30k support again but crypto remains in a choppy market
Crypto is still in a doldrums of summer as many investors have taken a sell in May and go away approach. We think these combined factors below are partially why crypto remains in a choppy market environment for now:
-Institutional investors taking money off table early in year locking in performance fees
-Many institutional investors who were trading crypto are away for the summer months
-Less institutional capital, more retail, lower volumes, and lower liquidity = choppy VOL rising
Yet, Bitcoin continues to hold onto the ~$30-40k trading range it’s been in since late May after briefly falling below $30k yesterday and rallying today.
Source: FSInsight, Bloomberg
Macro picture softening has been a headwind working against crypto
We think a large reason for the recent selling and bounce today has been driven by the broader macro market environment. And we can’t ignore that some macro factors that were supporting the crypto markets are less rosy, at least for now. There is a lot going on in the chart below, so let’s break it down:
S&P 500 which had been hitting all-time highs started getting choppy back on July 12thThe 10Y treasury has continued falling possibly si...Reports you may have missed
BUYERS ON STRIKE Last week, we discussed our immediate-term cautious approach to the crypto market, highlighting recent geopolitical tensions, tax-related selling, negative fiscal flows, and the persistent rise in real yields as reasons for a more risk-averse positioning (albeit relative, as holding 7.5% in cash and the rest in crypto is hardly considered risk-averse in most circles). This uncertainty has persisted into this week, evidenced by what we consider an...
Fiscal Dominance, Flows from China, Plus Some Thoughts on Global Conflict (Core Strategy Rebalance)
WHAT BTC SHRUGGING OFF CPI SAYS ABOUT CURRENT FISCAL SITUATION The most significant piece of macro data this week was the CPI. Headline CPI registered at 3.5%, surpassing the anticipated 3.4%, while core CPI remained steady from last month at 3.8%, also above the expected 3.7%. This increase was largely attributed to rising costs in auto insurance and shelter. Consequently, interest rates saw a sharp rise, with the 10-year Treasury...
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
Articles Read 1/1
🎁 Unlock 1 extra article by joining our Community!
You’ve reached your limit of 1 free monthly articles. Please enter your email to unlock 1 more articles.
Already have an account? Sign In b808c9-a87f4b-5108e1-70e992-c3ebdf
Already have an account? Sign In b808c9-a87f4b-5108e1-70e992-c3ebdf
