The biggest macro data point of the week was the preliminary survey data of the University of Michigan Consumer Sentiment Index for May 2024, which was significantly below expectations. The estimate was 76.2, but the result was 67.4.
Readings on consumer sentiment for both current conditions and future expectations fell sharply, highlighting some malaise within the economy.
Following the release of this data, Bitcoin retraced its gains from the previous day, falling back from $63,000 to the $60,500 area (current price is $61,200).
Technical analysis shows that this drop was expected, as we shared with the community on May 9.
----Bitcoin broke through $61,000 to form a momentum reversal signal. It is expected to rebound by about 2,000 points to test the high point of the previous stage. The current position is the Fibonacci 0.5 position. The callback range is relatively large. In the short term, we can only see whether it can break the purple trend line.
----However, before Bitcoin breaks through the purple line, altcoins may experience a false breakthrough at the 12-hour or 24-hour level, and if they continue to fall, they may not be able to hold the bottom line.
At this stage, Bitcoin price remains at $60,000 and can remain optimistic. I would welcome the opportunity to buy more Bitcoin in the $59,000 to $62,000 range.
Short Term Holder Realized Price (STH--RP)
Bitcoin’s realized short-term holder price can serve as a major on-chain support/resistance indicator (current realized short-term holder price: $60,000) - After another week of sideways price action, Bitcoin has stabilized above the realized short-term holder price.
Bitcoin Spot ETF
The capital flow performed poorly this week. One good thing is that the outflow of GBTC funds has also been suppressed, and no longer puts sustained selling pressure on spot Bitcoin.
Trump supports cryptocurrency
The former US president's support for Bitcoin shows that Bitcoin enthusiasts have become an important voting group, forcing political actors to meet their demands. They have enough capital and economic appeal to make it unwise to drive them away. Trump's use of the term "cryptocurrency" instead of "Bitcoin" may cause dissatisfaction among Bitcoin maximalists, but considering his older age, it is not surprising that he is not very familiar with the difference between Bitcoin and other cryptocurrencies.
It’s understandable that politicians would prefer to appeal to a broad base rather than exclude non-Bitcoin extremists. It may be better to lump cryptocurrencies and Bitcoin together rather than adopt hostile legislation. If Bitcoin maximalists are right about the distinction between the two assets, the market will sort it out on its own without state intervention. In fact, there is already a digital asset with billions of dollars in ETF inflows and Wall Street support.
Important financial calendar for next week
Crypto traders are looking for the next catalyst to watch. Next week the market will see US inflation data and hear a speech from Powell. I think the upcoming PPI and CPI data on May 14th and 15th will likely determine the next major direction for the USD and Bitcoin.
In my opinion, troubling inflation is occurring because wages are simply not keeping up with the rapid increase in prices. A lot of companies are going to have to make a choice: raise wages, or lay off employees. We hope the former will increase wage growth in line with prices without creating a wage-price spiral. If the latter occurs, then you’ll have a classic recession and the Fed will be accommodative on the other hand.
Barring any major surprises in the data or Powell’s tone, we are likely to see volatility continue to compress. In the absence of clear macro or crypto-specific catalysts, the correlation between traditional markets and crypto assets will likely continue to rise.
Cryptocurrencies will take inspiration from the US stock market. The 13-F filing deadline is May 15th, and many companies waited until the last minute to submit. It will be interesting to see who holds positions in US spot Bitcoin ETFs.
The 13-F application is due by the May 15 deadline. The details are as follows:
JPMorgan Chase has $760,000 worth of BTC ETF – the largest bank in the US;
Wells Fargo has $143k worth of BTC ETF — the fourth largest bank in the US;
U.S. Bancorp has a $14 million BTC ETF — the fifth-largest bank in the U.S.;
PNC Bank has a $10 million BTC ETF — the eighth-largest bank in the U.S.
William Blair, an investment bank with $142 billion in client assets, has a $6 million BTC ETF;
BlackRock owns $5.5 million worth of the IBIT Bitcoin ETF;
A Rothschild bank has $3.6 million in BTC ETFs;
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Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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