I was looking at the dollar index on a short-term and a long-term basis. The short-term moves up and down and seems to affect markets; the bigger picture, though, is that it’s inexorably going down. That’s positive for real assets, if only from a price perspective -let’s ignore the real value for now. Equities remain elevated but with no indication of going down. Gold seems well supported close to $1,900.
In the crypto space, in a world more volatile or less correlated to traditional markets, BTC continues to over below the 40K mark, currently at $38,300.
I remain decidedly bullish in the long-run but the resistance will need some positive fundamental trigger to be broken. Onchain data suggest that long-term holders and whales were buying during the dip, but this process takes time and could require another visit down in the lower 30K’s or even the upper 20K’s.
On the other side of that theory, though, it’s fascinating to see a lot of the oversold indicators going back to acceptable levels and also the stablecoin supply growing steadily and to record levels.
I also take note of funding rates across exchange bouncing back closer to zero.
Two charts show the average holding price of both ETH and BTC and could serve as a general floor for the broad crypto market, at $1,700 and $37,800.
Another potential floor is hinted at by a massive trader, buying a large call position at a $30K strike.
On the session, the BTC Dominance index rose as alts underperformed. ETH fell about 5%. LINK lost about 7%. ADA and a lot of DeFi coins like AAVE, COMP, MKR underperformed further, dropping between 8% and 10%. I’m still bullish on alts and on ETH, in particular, as you can see on-exchange reserves continues to go down, hinting at lower selling pressure.
By the way, last information nugget, I was talking about the value of the US dollar earlier. Did you hear about President Biden pushing for a $6 trillion US budget, for federal spending, for the next fiscal year? That’s a lot more cash pouring into the economy. I wonder where it will end up.
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