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Crypto Correction Deepens
Crypto assets have come under heavy selling pressure over the last week amidst a shift in outlook on the Fed. Market expectations have swung back in favour of anticipating further tightening from the Fed when it meets in coming weeks for the May FOMC. Over the duration of the SVB collapse and banking sector fallout, rate hike expectations had dwindled heavily leading to a fresh surge of demand in crypto. However, in recent weeks, market pricing has shifted back in favour of a further .25% hike in May along with an increased likelihood of a further hike in June.
The subsequent rally in USD and yields has put pressure on risk assets, including crypto, with Bitcoin seen falling around 10% over the last week as traders took profits on the recent rally. Near-term there remains plenty of uncertainty attached to the Fed outlook. With this in mind, crypto is likely to stay under pressure ahead of the May FOMC.
Looking ahead this week, US data and US earnings will be the key inputs to watch for crypto traders. Any weakness in US GDP might help pull tightening expectations back a bit supporting crypto, similarly for US earnings. However, should GDP prove resilient this should keep crypto assets under pressure near-term.
Technical Views
BTC
The reversal lower in BTC has seen the market breaking back below the 28110 level. While below here, the focus is on a continuation lower, in line with bearish momentum studies readings with 24930 the next key support to note.
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ETH
Following a short-lived breakout above the 2025.5 August 2022 highs, ETH has since reversed and is now trading back below the level. With momentum studies bearish further downside is expected near term. However, given the bull channel framing price, while 1695.5 holds as support, the bull view remains intact.
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LTC
The latest test of the 102.73 level has seen the market reversing lower. The bull channel remains intact for now keeping the focus on an eventual breakout above the level and a continuation higher. However, with momentum studies bearish, near-term downside is still expected with 73.49 and the channel lows the next key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.