Yesterday’s narrative was somewhat bittersweet: on one hand, Fed policies remain hyper accommodating which is positive but, on the other hand, the accommodating stance is based in lingering concerns about the economic recovery in the US -but also globally. Among noteworthy earnings, we heard from PayPal and Facebook reporting good -but not great- results. The split here really is about acknowledging strong activity previously and the expectations about the future.
Naturally, that’s a split that also applies in crypto. Yesterday, we pierced back through the 40K mark, on a journey now composed of eight consecutive green days. We’re currently closing the day right at that level, after almost reaching $41,000 intraday.
As it’s been the case so far, everyone is looking at BTC and, as people are less enthused by alts, the BTC dominance index continues to rise, now around 49.
While the USD balance of your diversified crypto portfolio is undoubtedly up, alts are indeed underperforming. With the exception of LUNA that boldly rose 17% yesterday, other coins like ADA, ETH, or ZEC rose barely 1%.
For anybody trading ETH/BTC, you’ll notice we’re right at a support zone and, depending on your view, this might be the time to either short hard if we break down, or, buy in bulk with the hope of a bounce back up. I’m edging towards the latter.
Something I do find interesting is the Kimchi premium falling down to zero. It’s just one data point amongst many but ironically a falling premium was sometimes an indicator of a reversal and extension of a bullish move, which maybe we’ll witness now.
Another chart I came across comes from CryptoQuant, they’re keeping an eye on the all exchange reserve of BTC which might be reversing and starting to trend down again, as it’s done during most of the bull run. Naturally, with less and less supply of coins to sell, the buying pressure would start to build up and overtake, ultimately resulting in higher prices.
As a last information nugget, and a positive one at that, UBS is looking at potentially offering prime brokerage services for crypto ETPs in Europe. Crypto is a growing pie and everyone wants a slice, it seems.
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