Weekly Market Update: What You Need to Know (05-11 June)

Crypto & Economic Calendar

The events listed below inform governments, corporations, traders and investors on the health of the economy, which can lead to volatility in markets and currencies.

  • Monday
    • 0430 ET: [GBP] Composite and Services Purchasing Managers Index (PMI)
    • 0945 ET: [USD] Services and ISM Non-Manufacturing PMI
  • Tuesday
    • All Day: [KOR] Holiday
    • 0030 ET: [AUD] Interest Rate Decision
    • 2130 ET: [AUD] Gross Domestic Product (GDP) Q1 (QoQ)
  • Wednesday
    • 1000 ET: [CAD] Interest Rate Decision
    • 1950 ET: [JPY] GDP (QoQ)
  • Thursday
    • All Day: [BRL] Holiday
    • 0030 ET: [INR] Interest Rate Decision
    • 0830 ET: [USD] Initial Jobless Claims
  • Friday
    • 0630 ET: [RUB] Interest Rate Decision
    • 0830 ET: [CAD] Employment Change

Bitcoin Indecision Continues

Bitcoin continues a sideways indecision between two key levels. We observed a 7% breakdown over the weekend, again tapping into demand just over $25,000.

Overhead is the critical resistance just below $30,000. Through the 2020-2021 bull cycle, this served as the key horizontal support. Recovering it would likely spur a larger rally.

Price is currently inside the value gap, which is a historical range with minimal trading volume. Algos and traders typically like to avoid these areas due to lack of data or key levels. A close below it is bearish due to price generally trying to avoid entering these levels. However its not unusual to see price return to gaps like this to consolidate and confirm support or resistance.

From a horizontal support perspective, we also have the current support between the 38.2 and 50 fibonacci retracement levels. In an uptrend or bullish market, this range is also where price usually finds support before upside continuation. There is an additional diagonal support level extending from the end of March, which the weekly continues to respect; that is currently sitting at $25,400.

Bull Perspective: For now the uptrend remains intact, but the bulls are at-risk, being at the lower range of the current trend. They don’t want to lose the 50% fib retracement support level ($24,500); or the diagonal support ($25,000). Closing below those on the weekly means a lower high and lower low, likely leading to a more pronounced downside. On the other hand, a breakout above $30,000 will bode very well for bulls.

Bear Perspective: Indecision in crypto markets is partially due to regulatory uncertainty and the ongoing discussion economic issues like inflation, interest rates and potential recessions. While bears feel more confident given the current macro narrative and rejection from $30,000, they need to see a close under $24,000 to invalidate the higher-timeframe uptrend. If we lose $24,000, look for support around $23,000 (and the 62% fib retracement), and $21,600.

Market Sentiment

The Cryptocurrency Fear and Greed Index peaked at 69 in April, before consolidating into a range around 50, with neutral sentiment.

The neutral reading is a reflection of the current indecision in markets, as recessionary worries and banking instability spooks some investors; others are cautiously optimistic that peak rates are here or close, and that the US Government can navigate a “soft landing” and avoid a pronounced recession.

The overall risk appetite, including that of crypto markets, will be dictated by the macroeconomic climate, so monitoring of the US Fed and European Central Bank (ECB) as leading sentiment indicators is important.

Trading Tips

Think about self-custody of your crypto, using technology like Ledger or Trezor. Storing your crypto on exchanges leaves it vulnerable to loss, if the company goes out of business. It also is used by exchanges to offer derivative services, which isn’t always beneficial to traders. Here are five reasons to consider hardware wallets:

  1. Control and Security: Hardware wallets are offline wallets that provide users with full control over their cryptocurrency assets, reducing reliance on third-party services which can be vulnerable to hacks or service disruptions.
  2. Privacy: With self-custody, users maintain their financial privacy. In traditional banking and some cryptocurrency exchanges, transactions and account details are known to the institution, which allows them to do things like sell their order book info to whales and institutions, or like FTX – they traded against their own customers.
  3. Direct Ownership: Self-custody of cryptocurrency means direct ownership. It represents the core principle of cryptocurrency – the idea of decentralization and eliminating the middleman in financial transactions. The user owns the keys and therefore owns the coins.
  4. Less Trust Dependence: With hardware wallets and self-custody, the security of your crypto assets doesn’t depend on the promises or competence of a third party. This becomes particularly important considering the history of security breaches on major crypto exchanges where users have lost their holdings. The author can speak to that one personally – I lost a lot of my portfolio when a third party who had custody of my coins was hacked
  5. Recovery and Redundancy: Hardware wallets often support recovery phrases to restore wallet data, allowing users to recover their assets in case the device gets lost, stolen, or damaged. This feature provides an extra layer of security and comfort for the user, knowing that their assets can be recovered and aren’t tied to a single piece of hardware.

If you enjoyed this article and want more hot takes and interesting posts about the economy, web3, crypto, decentralized finance, NFTS and more – you can follow Papi on Twitter at https://twitter.com/1MrPapi.

Disclaimer: Nothing found on this website, or any sources linked to this website includes financial advice of any sort. We are not certified financial advisors, use our content at your discretion as entertainment, and as an educational resource. Do your own research.