Economic Data and Crypto Prices Await Direction as Market Signals Remain Uncertain

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Economic data coupled with crypto prices are still in wait-and-see mode.

Week-over-week performance:

BTCUSD: 27,793, +1.45%ETHUSD: 1,898, +2.04%US02Y: 4.57%, +23bps (!!)DXY: 104.3, +1%OR (USD/OZ): 1,939, -1.12%NDX: 14,298, +3.24%VIX: 17.94, +4.3%VVIX: 97.57, -0.07%

Macro side:

The latest data on the PCE index exceeded expectations. Core PCE rose 4.7% year-on-year, from 4.6% year-on-year in March. Taking into account this new information as well as the release of the FOMC minutes last Wednesday, which revealed a division among Fed members regarding future rate hikes, it seems that we are expecting another rate hike.

While the 2-year yield rose slightly, Fed futures are now split at 60% for a 25 basis point hike and 40% for a no-rate hike. Chart 1: Implied Fed futures rate

On the crypto side:

The shift in the debt ceiling created one-off moves, with BTC’s 7-day realized volatility sitting at 41% at 1-year medians, closing the gap with ATM’s implied volatility.

If the crypto lags the TradFi markets, we are set for a rally here.

From a chart perspective, in my opinion, it looks like we need to touch up the 25,000 mark before any further upside breaks.

With the RSI at 53, I’m still waiting.

Similarly, ETHUSD was unable to break through the trendline and is still trading within a tight range. Given all the positive stories regarding the Ethereum network (i.e. ETH staked at an all-time high) and with ETHBTC at 0.06834, I still think there is outperformance potential for ETH and alts.

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