Macro Overview
This week saw major developments coming from the United Kingdom (UK) with the CPI data YoY for May ’23 standing at 8.7%, more than the expectations of 8.4% showing inflation has continued to persist with the decision to increase Interest rates to 5.0%. In the U.S., the Fed Chairman acknowledged the need to raise rates again this year, and potentially another 2 times to combat rising inflation. This week, the US initial jobless claim stood at 264K, more than the expected data of 260K, indicating more people filed for unemployment.
U.K Consumer Price Index (CPI) YoY
Source: Investing.com
Despite rising inflation data in the UK, crypto witnessed several positive developments coming across the globe with the International Monetary Fund (IMF) supporting crypto assets in the long run, saying against banning them. One of the biggest news came from the U.S. when Federal chairman Powell acknowledged stable coins like USDT,USDC as a form of money.
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
Summary: This week, BTC broke out of a descending trendline, marking the end of a more than two-month-long consolidation phase. Below, one can observe there is a major support at the $25200 level, which coincides with the 200 EMA D (Exponential Moving Average) and a significant support/resistance flip. Additionally, above there is a supply zone at $31000 and an important support/resistance flip at the $32800 level to consider. Considering the breakout from the consolidation phase and the supportive technical indicators, the general outlook for BTC appears positive, suggesting potential upward momentum in the near future.
Ethereum Technical Analysis
Source: TradingView
Summary: This week, ETH has shown strong performance, finding support from an upward trendline and remaining above the 200 EMA (Exponential Moving Average). Additionally, there are two resistance levels at $2023 and $2025 to watch. In the 4-hour timeframe, ETH has successfully broken out of a descending trendline, indicating a bullish outlook. Considering the positive price action, the overall outlook for ETH appears to be optimistic, suggesting potential further upward movement in the near term.
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