Morning‌‌ ‌‌Update — January ‌‌20th — Macro and Crypto Markets

Markets reopened in the US and now feel somewhat risk-on. Yesterday the S&P jumped almost 1% while treasuries and gold remained muted. The dollar index fell sharply. Early in Asia, futures are edging higher in Japan and Australia, but seem to be leaning towards a dip in Hong Kong.

In crypto, the focus is on ETH. With the CME listing ETH futures soon (early Feb) but with the previous underperformance relative to BTC, it seems that traders are now cycling some of their BTC gains to ETH — with the hope that the second largest market cap coin will outgrow its new all-time high further.

ETH rose 14% on the session yesterday, touching a new high of $1,439.

While that was happening, the rest of the crypto space stagnated, if not retraced its steps. Whether it’s in USD or in BTC terms, alts didn’t follow. I suspect this is just a question of time, though; investors cycle through the coins from larger to smaller and more speculative ones. First BTC, then ETH, then the Top 5 alt coins, then the Top 10, etc.

For now, BTC seems to remain in the pennant we discussed in yesterday’s briefing, currently at $36,200.

We’re seeing a lot of conflicting data. Many shorts are disappearing on spot and derivatives exchanges, leaving free way for prices to rise and then some massive selling pressure pushes prices down. There are also some significant transfers from wallets to exchanges, suggesting that some whales are waiting for another push higher to cash out on a chunk of their holdings.

Away from pure market data and price action, Treasury nominee Yellen commented on the crypto space saying “cryptocurrencies are of a particular concern for terrorist financing, money laundering”. One can’t say that markets were particularly reactive to the comment, though.

In a maybe related note, the volume on DEX (decentralized exchanges) is reaching new high, either because people enjoy the ability to trade while keeping their key and privacy, or, because the focus seems to now favour alts and DeFi.

Passionate about financial markets, long-term investments, the occasional short-term trade and disruptive technologies.