Macro Overview
This week marked several macroeconomic events including U.S Consumer Price Index (CPI), U.S Producer Price Index (PPI), Federal Interest rate decision and FOMC press conference. U.S. CPI (YoY) for May stood at 4.0%, better than expectations of 4.1%, showing encouraging signs with inflation cooling off as compared to 4.9% in May 2022. Even the U.S. PPI, which marks the change in price of goods sold by manufacturers, showed (MoM) improvement for May at -0.3% compared to 0.2% for its previous month. Even for the first time in 15 months, the U.S Fed decided to pause interest rate hikes, deciding to keep interest rates at 5.00% – 5.25%.
U.S. Federal Interest Rate
Source: Investing.com
Though, despite such encouraging signs, markets failed to see a rally due to the Federal Open Markets Committee’s statement hinted at future rate hikes and indicating less chances of a rate cut in 2023, dampening investor enthusiasm.
Crypto Markets Overview
Over the past week, crypto markets saw a correction of 6% led by altcoins mainly due to factors like SEC taking legal actions against leading exchanges, U.S. declaring several altcoins as a security causing fear among the crypto space. Due to this, a significant shift is observed with over 50% of BTC reserves on exchanges outside the United States. This trend can be attributed to the prevailing regulatory uncertainty within the country, which declined to levels last seen in 2017, as more firms and assets seek refuge in non-U.S. platforms. Ether (ETH), the second-largest crypto by market capitalization, has also experienced a steady decrease in reserves. Approximately 56% of ETH held on crypto exchanges can now be found outside the United States.
On the adoption front, BlackRock, world’s biggest asset manager, managing $10 trillion assets, has filed an application to launch the first publicly traded spot Bitcoin exchange traded fund (ETF). This is seen by many investors as a stamp of approval for the digital currency and would likely unlock significant amounts of institutional investment in Bitcoin. Also, Colombia’s Central Bank Partners With Ripple to Develop CBDC on Ripple’s XRP Ledger blockchain to improve the efficiency and speed of its payments system. The CBDC will also allow the central bank to reach unbanked and underbanked populations.
Bitcoin Technical Analysis
Source: Tradingview
In May, Bitcoin experienced a significant price movement as it jumped from the 25800 level, which served as a demand zone, to reach 27500. After reaching this level, Bitcoin entered a period of consolidation. It later retested the 25800 level and successfully bounced back to 28300. However, since then, Bitcoin has been in a downtrend. Recent negative news has weakened the market sentiment, and currently, the liquidity is around 24750. The market is closely monitoring these developments to assess the future direction of Bitcoin’s price.
Ethereum Technical Analysis
Source: Tradingview
From mid-March, Ethereum (ETH) experienced a notable increase in price, rising from around 1400 to approximately 2100. However, since May, ETH has been following a downtrend. Despite a consolidation phase at the beginning of June, ETH attempted to reverse the trend but ultimately declined, breaking the 1800 level. More recently, it also broke the significant support/resistance flip at 1700. As of now, the market appears to be in a wait-and-watch state, with traders and investors monitoring the situation for potential shifts in market sentiment and price direction.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The Content is for informational and educational purposes only. The Content is not an offer, or solicitation of an offer, to invest in, or to buy or sell any interest or securities or virtual digital assets or to participate in any investment or trading strategy.The Content or any part of it is not legal, financial, investment or tax advice. The calculations, data, risk return formulations, performance or market capitalization indicators are based on the independent data sourced by CoinDCX or third parties. Past performance is not indicative of any future results.
