BTC above 30k for the first time in 10 months

This Daily Digest will cover:

• 👉 NFP solid but brushed off
• 🔥 BTC above 30k for the first time in 10 months
• 🔎 ETH event the next big test
• ❓ CPI and FOMC minutes in focus

I return after the long easter weekend with questionable levels of chocolate in my system and markets broadly unchanged from last week. The exception to this is in crypto where we find BTC trading above 30,000 for the first time in nearly a year and ETH at 1925. Whilst this is the break I have been looking for we have to be conscious about the upcoming Shanghai upgrade. Whilst I think the potential short term positives and negatives balance out, there is the potential for this to be a “buy the rumour sell the fact” event. If this plays out it will be a near term scenario as I am a firm believer in the long term benefits of the upgrade. Hence, rather than add right here and now I will layer bids in BTC and ETH at 29,500 down to 28,500 and 1850 to 1800.

Elsewhere our old friends inflation and interest rates take centre stage again after a week of employment shenanigans. CPI and the FOMC minutes are released tomorrow with expectations of a sharp fall needing to be met to underscore the markets belief that rates are close to the top. The minutes will make interesting reading as the current feeling is one more rise then stop for the FED. I find myself a little more in the camp that the FED may hold off for a while rather than hike till they break the economy. I might be giving them more credit than they deserve but I suspect the minutes will show that the hike last month was a much closer call than many expected.

The net result of this is I continue to favour a mildly lower USD and one last blow out rally in stocks before reality hits. CTA positioning is showing the market is very short stocks and getting no reward for it. With seasonal factors in play there is potential for a lot of these shorts to get squeezed out before the fundamentals kick in…

As always, good luck

Richard Usher
Head of OTC Trading