Crypto Explodes

This Daily Digest will cover:

• 🤯 Crypto explodes
• 🔥 ETH leads the pack after seamless Shanghai event
• 👉 Alts join the rally
• 💲 Inflation, remember that? USD weakens

The last 48 hours have been dramatic to say the least. Inflation is showing signs of cooling as both CPI and PPI in the U.S came in beneath expectations. This gave the USD a nudge lower and risk assets a bid tone. Euro/usd has vaulted 1.1000 with ease and dare I say it looks comfortable.

This is all frankly a side show to the dramatic moves in crypto over the last 24 hours. The success of the ETH Shanghai upgrade has seen a burst higher from 1870 to 2120 which has blown through significant technical resistance and shown just how badly positioned the market has found itself. I wrote on Wednesday that every conversation I had with people involved words such as underweight, squeeze and overdone, well this is the result. The market does not have the risk it needs/wants. In fact it appears the speculative market was short expecting liquidation post the upgrade. This has not played out for a number of reasons. The unlocking process takes time and a lot of the staked ETH is from levels above the prevailing market. Combine this with the fact that the positives for ETH keep growing and the move higher makes more and more sense. Chart of the day below shows ETH/USD and medium term this move above 2000 opens up 3,500 as a measured target. Dips back to 2,000 should be bought with only a move sub 1850 causing me to change my mind.

Retail sales are the only data point to catch the eye today. A miss to the downside would appear the likely scenario bearing in mind the recent data releases we have seen. This could cause a little more USD weakness and may make stock markets rethink yesterday’s gains as we head into earnings season. But frankly who needs stocks when crypto is alive again!

As always, good luck.

Richard Usher
Head of OTC Trading