With optimism about economic recovery, most equity markets finished up last week. The VIX dropped sharply while the S&P and the DOW gained, and the 10-year yield fell. Gold gained as well but not enough to erase the massive loss endured on Thursday.
We’re seeing a very clear market dynamic: Yesterday, the dollar rose and, conversely, equities were sold. The S&P, the Nasdaq, and the Dow are down. Gold and silver are most definitely down, both losing around 2% on the session.
I have to wonder how long before Bitcoiner and Twitter CEO Jack Dorsey pulls the plug on Elon Musk's twitter account. Do we really need heartbreak emojis wiping $100B off the value of the crypto market cap? On a positive note, Musk's tweets are having less effect, with only a 5% drop in BTC post his latest attempt at humor.
I look at traditional markets because the moves and risk appetite can have an impact on crypto markets. For now, equity indexes look steady and are at elevated levels, but their inability to break higher worries me somewhat.
With the US coming back from a long weekend, one might have expected stronger moves in equity markets—that didn’t happen. Most indexes traded barely half a percent down. The 10-year yield rose back above 1.6%. Gold is teasing investors, currently trading at $1,899.
Okay, so celebrating doing nothing got boring fast. Bitcoin has spent another day bouncing between support and resistance, and although it's nice not to be edging towards a heart attack, it has lead me to delve into some 'activity metrics' to get a better idea of the state of play.
Crypto markets (trading 24/7) didn’t rest and, unlike equities, rose. BTC gained almost 5%, rising from $35,500 to the current $37,300.