Gold and crypto experience synchronized plunges, SEC approval may provide a rebound opportunityđ
In a true 'take-no-prisoners' approach, the general risk-off tone finally spilled over to crypto, where a break of spot gold <1890 coincided with a late session crash in crypto prices towards the NY close. After flat-lining at ~29000 for BTC and 1850 on ETH for seemingly an eternity, a large volume flash-crash saw prices fall by almost -15% in a straight line on extremely thin liquidity. Unsurprisingly, the swift crash lower liquidated long future positions by the largest amount in many months with over 32k BTC long futures being stopped out, adding to the reflexive downward spiral. To complicate matters further, prices recovered about half of its losses in a semi V-shaped bounce as news headlines broke that the SEC appears 'poised' to approve Ethereum futures-based ETF based on "people familiar witht he matter".
We expect prices to continue moving in tandem with the general risk-on/off-tone in macro markets, and in particular with whether interest rates are going to make another serious push higher from these technically significant levels. Keep your risks tight and stay defensive.
