MARKETS week ahead: May 6 – 12
Last week in the news
As it was expected, the Fed held interest rates without change at their FOMC meeting held on 1st May. Market nervousness prior to the meeting brought back some higher volatility. The USD modestly weakened, while gold ended the week testing 2.3K level. The US Treasury yields dropped after the FOMC meeting trading session and especially weaker than expected US jobs for April, reaching 4.5%. Weaker jobs data supported positive sentiment for the US equities, where S&P 500 was brought back to the level of 5.120. The crypto market had another highly volatile week, but still manages to end it with a little change from the week before. Bitcoin slipped to the 57K support, but dip buyers managed to return the price above the 63K during the weekend.
The major event during the previous week was the FOMC Meeting, held on 1st May. The Fed's rate decision and a view on current economic developments was widely expected by the market, considering inflation in the US, which is picking up slowly. This was acknowledged by the Fed, as well as a still strong labour market. Still, they noticed that the economic activity expanded at a moderate pace in Q1. The Fed continues to hold on to their 2.0% inflation target, in which sense, the first rate cut might be, and most probably, will be postponed. At this moment, no one could provide information with high certainty whether there will be one rate cut during this year, but the markets are currently estimating September with a 54% probability, while the majority of market participants switched their view on December this year.
While the US is delaying rate cuts, the market is expecting to see the ECB to cut interest rates at their June meeting. Economists are now discussing that such a course of action would weaken the euro which might put pressure on the growth of the Euro Area. At the same time, a small rate cut will most certainly not impact any significant credit demand, in which sense, it will not provide too much assistance to companies operating within the Euro Area.
Another relevant news for the previous week was that the co-founder and ex-CEO of Binance crypto exchange was sentenced with four months in prison, after pleading guilty for money laundering at his crypto exchange. Although it was expected that he would get at least three years of prison sentence, the court took into account CZ`s deal with the U.S. government in November last year and a settlement of $4.3 billion. At the same time, experts are noting that his personal wealth, estimated at $33 billion, would not be affected by the court decision.
There have been a lot of discussions during the previous period regarding the sale of investment units from the Grayscale Bitcoin Trust (GBTC) and its impact on the price of BTC. As news is reporting, Grayscale finally experienced the first total funds inflow, after quite a long time of funds outflow. As Farside Investors are reporting, there has been a total $63 million in inflows during Friday. As a reminder, Grayscale was the first BTC fund, but due to its high fees, the funds BTC holdings decreased from 600.000 down to 290.000 since the first BTC ETF was approved.
Crypto market cap
Market nervousness regarding Fed's next moves in light of inflation pick-up was also evident on the crypto market during the previous week. Namely, as frenzy over crypto ETF`s and BTC halving is over, the crypto market, and especially BTC, are returning to the general market sensitivity to macro developments. Right before the FOMC meeting, BTC reverted to the down side and reached levels below 57K within quite a short time. After the meeting Fed Chair Powell's speech brought back some investors into the crypto market, while weekend trading pushed the crypto market to levels above the end of the week before. Although it was extremely volatile week, still, total crypto market capitalization was increased by 1% from the end of the week before, where it has been added total 32B. Daily trading volumes were also increased to the level of 130B on a daily basis, from 104B traded a week before. Total crypto market capitalization increase from the end of the previous year, currently stands at 655B, which represents a 40% surge from the beginning of this year.
The majority of altcoins were traded in a mixed manner during the previous week. During the week BTC was on a losing side, however, weekend trading brought back its market cap to the previous levels, and even increased it by 1.6%, adding total $ 20B to its total market value. On the opposite side Ether did not manage to regain previous strength, and ended the week around 1.4% lower from the week before, losing around 5.6B in value. This time major altcoins were among higher gainers. In this sense, Solana was leading the altcoin market with an increase in value of 7.3% w/w, adding total 4.5B to its market cap. DOGE was another altcoin with significant weekly performance, with an increase in value of 12.6% adding total 2.6B to its cap. This week XRP managed to add 1.17B to its value, increasing it by more than 4% w/w. Relatively solid weekly performers in relative terms had Bitcoin Gold, which increased its cap by 8.4%, Pokladot surged by 8.5%, Filecoin was up by almost 8%, while Polygon was up by 5.3%. Several coins were on a losing side, like NEO, with a decrease in value of 4%, Uniswap was down by 1.5%, while Litecoin was down by 2.5%.
Developments within circulating coins relaxed a bit during the previous week. Ether decreased the number of its coins on the market by 1.6%, which is not so frequently seen. Miota had an increase in its coins in circulation by 0.6%, the same as traditionally, Filecoin. Tether increased its market cap and number of coins in circulation by 0.2% this week.
Crypto futures market
For another week in a row major developments on the crypto market were occurring during the weekend trading sessions, hence, futures from Friday`s trading on the CME are not fully reflecting the actual developments on the crypto spot market. In this sense, Monday trading sessions on the futures market might bring some corrections.
BTC short term futures ended the week around 1.8% lower from the week before, while those maturing within a longer time frame, were last traded lower by more than 8%. Futures maturing in December this year reached the last price at $62.590, and those maturing a year later closed the week at price $67.250.
ETH short term futures were last traded down by around 1% on average, while those with longer maturity were down by more than 5%. ETH futures maturing in December 2024 closed the week at $3.138, and those maturing in December 2025 were last traded at price $3.297.
As it was expected, the Fed held interest rates without change at their FOMC meeting held on 1st May. Market nervousness prior to the meeting brought back some higher volatility. The USD modestly weakened, while gold ended the week testing 2.3K level. The US Treasury yields dropped after the FOMC meeting trading session and especially weaker than expected US jobs for April, reaching 4.5%. Weaker jobs data supported positive sentiment for the US equities, where S&P 500 was brought back to the level of 5.120. The crypto market had another highly volatile week, but still manages to end it with a little change from the week before. Bitcoin slipped to the 57K support, but dip buyers managed to return the price above the 63K during the weekend.
The major event during the previous week was the FOMC Meeting, held on 1st May. The Fed's rate decision and a view on current economic developments was widely expected by the market, considering inflation in the US, which is picking up slowly. This was acknowledged by the Fed, as well as a still strong labour market. Still, they noticed that the economic activity expanded at a moderate pace in Q1. The Fed continues to hold on to their 2.0% inflation target, in which sense, the first rate cut might be, and most probably, will be postponed. At this moment, no one could provide information with high certainty whether there will be one rate cut during this year, but the markets are currently estimating September with a 54% probability, while the majority of market participants switched their view on December this year.
While the US is delaying rate cuts, the market is expecting to see the ECB to cut interest rates at their June meeting. Economists are now discussing that such a course of action would weaken the euro which might put pressure on the growth of the Euro Area. At the same time, a small rate cut will most certainly not impact any significant credit demand, in which sense, it will not provide too much assistance to companies operating within the Euro Area.
Another relevant news for the previous week was that the co-founder and ex-CEO of Binance crypto exchange was sentenced with four months in prison, after pleading guilty for money laundering at his crypto exchange. Although it was expected that he would get at least three years of prison sentence, the court took into account CZ`s deal with the U.S. government in November last year and a settlement of $4.3 billion. At the same time, experts are noting that his personal wealth, estimated at $33 billion, would not be affected by the court decision.
There have been a lot of discussions during the previous period regarding the sale of investment units from the Grayscale Bitcoin Trust (GBTC) and its impact on the price of BTC. As news is reporting, Grayscale finally experienced the first total funds inflow, after quite a long time of funds outflow. As Farside Investors are reporting, there has been a total $63 million in inflows during Friday. As a reminder, Grayscale was the first BTC fund, but due to its high fees, the funds BTC holdings decreased from 600.000 down to 290.000 since the first BTC ETF was approved.
Crypto market cap
Market nervousness regarding Fed's next moves in light of inflation pick-up was also evident on the crypto market during the previous week. Namely, as frenzy over crypto ETF`s and BTC halving is over, the crypto market, and especially BTC, are returning to the general market sensitivity to macro developments. Right before the FOMC meeting, BTC reverted to the down side and reached levels below 57K within quite a short time. After the meeting Fed Chair Powell's speech brought back some investors into the crypto market, while weekend trading pushed the crypto market to levels above the end of the week before. Although it was extremely volatile week, still, total crypto market capitalization was increased by 1% from the end of the week before, where it has been added total 32B. Daily trading volumes were also increased to the level of 130B on a daily basis, from 104B traded a week before. Total crypto market capitalization increase from the end of the previous year, currently stands at 655B, which represents a 40% surge from the beginning of this year.
The majority of altcoins were traded in a mixed manner during the previous week. During the week BTC was on a losing side, however, weekend trading brought back its market cap to the previous levels, and even increased it by 1.6%, adding total $ 20B to its total market value. On the opposite side Ether did not manage to regain previous strength, and ended the week around 1.4% lower from the week before, losing around 5.6B in value. This time major altcoins were among higher gainers. In this sense, Solana was leading the altcoin market with an increase in value of 7.3% w/w, adding total 4.5B to its market cap. DOGE was another altcoin with significant weekly performance, with an increase in value of 12.6% adding total 2.6B to its cap. This week XRP managed to add 1.17B to its value, increasing it by more than 4% w/w. Relatively solid weekly performers in relative terms had Bitcoin Gold, which increased its cap by 8.4%, Pokladot surged by 8.5%, Filecoin was up by almost 8%, while Polygon was up by 5.3%. Several coins were on a losing side, like NEO, with a decrease in value of 4%, Uniswap was down by 1.5%, while Litecoin was down by 2.5%.
Developments within circulating coins relaxed a bit during the previous week. Ether decreased the number of its coins on the market by 1.6%, which is not so frequently seen. Miota had an increase in its coins in circulation by 0.6%, the same as traditionally, Filecoin. Tether increased its market cap and number of coins in circulation by 0.2% this week.
Crypto futures market
For another week in a row major developments on the crypto market were occurring during the weekend trading sessions, hence, futures from Friday`s trading on the CME are not fully reflecting the actual developments on the crypto spot market. In this sense, Monday trading sessions on the futures market might bring some corrections.
BTC short term futures ended the week around 1.8% lower from the week before, while those maturing within a longer time frame, were last traded lower by more than 8%. Futures maturing in December this year reached the last price at $62.590, and those maturing a year later closed the week at price $67.250.
ETH short term futures were last traded down by around 1% on average, while those with longer maturity were down by more than 5%. ETH futures maturing in December 2024 closed the week at $3.138, and those maturing in December 2025 were last traded at price $3.297.
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