LDO Risk/Reward Looks Good Here, Immediate-term Macro Picture Still Uncertain (Core Strategy Rebalance)
Flows and Sentiment Still Subdued
Last week, we received a better-than-expected CPI print, but the DXY continued to move higher due to global weakness and a hawkish Fed. We discussed the risks appearing in the metrics we use to gauge sentiment and flows. The overall lack of follow-through in the crypto market was evident.
Volumes, net ETP flows, the Coinbase discount, stablecoin market cap trend, and search interest for key crypto-related words all suggested that the market was ripe for a pullback, particularly among altcoins. As a result, we moved a portion of our altcoin allocation to stablecoins on Friday.
A week later, conditions remain consistent with what we observed last week. BTC, ETH, and SOL are still trading at a discount on Coinbase relative to Binance.
There remains a lack of stablecoin inflows, signaling a lack of capital desiring to enter the crypto ecosystem.
Bitcoin ETFs have also continued to see net outflows, with the 5-day moving average nearing year-to-date lows.
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