Weekly Report CFT - Monday 26, August 2024 - Bitcoin | Stocks | $ Dollar New Update

Weekly Report CFT Monday, August 26th, 2024
BTC and ETH ended their negative performance streaks, with BTC halting a three-week decline and ETH breaking a four-week losing streak. Both cryptocurrencies wrapped up the past week with gains, buoyed by the positive market sentiment surrounding last Friday’s Federal Reserve Jackson Hole Economic Symposium where J. Powell hinted at a potential rate cut next month, citing a cooling labor market and inflation nearing the Fed’s 2% annual target. By Friday, BTC was trading near $64,095 with a high near $65,000 and ETH around $2,765, with BTC up 8.8% and ETH up 6.6% over the week, bringing their year-to-date performances to 60.7% and 43.5%, respectively. However, as of August, their performances stand at -1.4% for BTC and -14% for ETH. Meanwhile, digital asset investment products saw a total net inflow of $533 million, marking the largest inflow in five weeks and bringing the year-to-date total to $22.7 billion, according to CoinShares' report, Digital Asset Fund Flows.
U.S. equities rose last week, securing a second consecutive week of gains, supported by anticipation of a possible rate cut as soon as September. Meanwhile, the small-cap Russell 2000 index continued to progress, further maintaining signs of a possible sectorial rotation. The S&P and Nasdaq closed higher for the week, near 5,632 and 17,877, respectively, gaining 1.4% and 1.6%. Meanwhile, the VIX index returned to the 16 range after peaking at 65 on August 5th. Several factors are expected to drive the market this coming week, including NVIDIA's corporate earnings and the PCE inflation figure for July.
U.S. Treasury yields continued to decline, with the 10-year yield hitting a low of 3.76% and the 2-year yield falling to 3.90%, as the likelihood of a rate cut in September increased following J. Powell's comments. This sentiment was further reinforced by recent data, including a weaker-than-expected July NFP report (114,000 vs. 175,000 expected) and cooling July CPI inflation at 2.9% year-over-year, the smallest annual increase since March 2021. The 10-year yield eventually closed at 3.80%, while the 2-year yield settled near 3.92%, narrowing the yield curve inversion to just 12 basis points. Market expectations for a September rate cut have strengthened considerably, with the CME FedWatch Tool indicating a 32.5% probability of a 50-basis point cut and a 67.5% likelihood of a 25-basis point cut.
In a similar fashion to yields, DXY pursued its steep decline, hitting a low of 100.60 and closing just above that level near 100.68 on Friday. The index is still testing the 100-mark today while the 200-week MA near 100.2 serves as the next support. On the upside, the 102.2 acts as the next resistance to watch.
Oil prices experienced volatility, dipping to a low of $71.71 early in the week before rebounding to close near $74.91 on Friday. The rebound has continued into this week as the WTI is currently trading near $77.50, fuelled by escalating tensions in the Middle East and Eastern Europe over the weekend, raising further concerns about global supply. This comes amid additional disruptions as Libya's government halted oil production.
BTC and ETH are trading lower today, with BTC pulling back to $63,670 after testing its ascending trendline near $64,500, while ETH is hovering around $2,700. Markets are looking ahead to a busy week, with NVIDIA earnings and Friday’s PCE data, the Fed’s preferred inflation gauge, expected to take center stage. Headline and Core yearly inflation numbers are expected at 2.5% and 2.7%, respectively.
Investors will also be looking forward to Thursday's second Q2 GDP revision and a batch of corporate earnings reports, including Dell, Salesforce, CrowdStrike, Abercrombie & Fitch, and Dollar General. Additionally, the final estimate of Consumer Sentiment for August will be released on Friday.
Client Profits
Since March, the Altcoins market has faced significant losses, with prices remaining low. Despite this, our trading strategy has consistently capitalized on price movements, allowing us to outperform the broader Altcoins market.
On August 5th, Bitcoin dipped below $50K, where we opened several long positions. We’ve already taken profits on some of these trades and are monitoring the remainder, as we see further upside potential.
Additionally, we’ve initiated short positions on AVAX and TRX following the recent price increases in BTC and Altcoins.
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