CME Basis Suggests We Are Near a Tradable Low, Plus Some Thoughts on Positioning Ahead of the Election
A Rough Stretch Amid Rising Uncertainty Skews Risks to the Upside
The past five trading days have been challenging for the crypto market, marked by significant uncertainty stemming from various geopolitical and economic events. Among the notable sources of market distress are:
- Geopolitical Tensions: Iran’s missile attack on Israel has led to heightened anticipation of an Israeli response, with oil prices spiking to $74.
- Natural Disasters: A devastating hurricane in the Southeast U.S. is expected to disrupt numerous companies and jobs for weeks, possibly months.
- Labor Strikes: The potential longshoremen strike, which threatens to halt all trade via ports in the Eastern half of the U.S., has added further pressure.
- Fed Hawkishness: During an interview on Monday, a somewhat “hawkish” Fed Chair Powell shifted futures pricing from a 50-bps cut to a 25-bps cut at the next meeting.
- Economic Data Uncertainty: Market participants are also nervous ahead of tomorrow's jobs report, despite a hotter-than-expected Services PMI this morning.
On balance, these events have nudged the market toward the "no landing" scenario on our Fed landing map.
Reports you may have missed
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
BTC ETFS SEE MASSIVE INFLOWS: IS CRYPTO NATIVE CAPITAL SIDELINED? BTC ETFs saw over $2.2 billion in net inflows across all spot ETFs from Monday through Wednesday of this week—the largest three-day sum of inflows since the products launched in January—bringing the five-day moving average to north of $500 million. This is certainly impressive and speaks to the explosive breakout we have seen this week. Source: Farside Investors, Fundstrat We've...
SOL OUTPERFORMANCE Last week, we highlighted the explosive activity on Solana as DEX volumes surpassed those on Ethereum, leading us to increase SOL's weighting in our Core Strategy. These elevated DEX volumes have persisted through this week, and SOL has dramatically outperformed, breaking out against ETH and gaining ground against BTC—all amid a sharp bond selloff and a rally in the DXY. Source: Artemis Source: TradingView A significant portion of...
