Morning Brief

Morning‌‌ ‌‌Update—Macro and Crypto Markets—May 11th

May 11, 2021
From time to time, we mention commodities, but these days, they are the highlight. With rising prices in copper, iron, crude, and lumber, the idea that inflation is coming pervaded the minds of investors. Bonds were sold, pushing the 10-year yield back above 1.6% and, as we’ve seen happen before, tech stocks suffered most. The Nasdaq fell almost 2.5% and the S&P lost over 1%.

In the general risk-off sentiment, we saw BTC pull back about 4.2% on the session, with intraday lows down 8.3%. We’re still at decent—or should I say consolidating—levels, currently at $56,000. The BTC Dominance index remains low, currently at 45.5.

ETH, which fell intraday, is closing in the green (still outperforming), currently just a tad below $4,000. 

Along with ETH, COMP and SOL held on well. Other alts suffered more: I’m thinking in particular of LINK, DOT, and ADA, respectively down 10%, 8% and 5%.

Onto more long-term and fundamental data, the numbers still point to a very supported and very bullish set-up.

On the one hand, we still have an increasing supply of stablecoins, which, obviously, suggest fresh fiat capital is coming into the crypto space to be used on exchange—and, naturally, to buy crypto.

On the other hand, we then see deeply negative exchange net flows (that means more coins moving away from exchanges and fewer coins going in), suggesting that more people are hodling and fewer people are ready to sell. We’re seeing that on OTC desks as well, where the supply is much lower than pre-bull run (and that’s a good thing, to have less selling pressure).

It’s also interesting to see less leverage on derivatives exchanges in comparison to recent times, when BTC was at these levels. With more real money going in, leverage can come later, if/when we go for another leg up.

The picture looks very similar for ETH, which says: there’s no reason to get out of here.

By the way, so that I don’t leave you without daily news: Did you hear that UBS is now exploring offering crypto investments to qualified investors? While this can be dismissed as just another bank talking crypto, it is not just that. Another massive bank receiving enough interest and seeing enough value in the crypto space to start making the shift ultimately means more capital flowing in. 

Written by: Justin d'Anethan, Sales Manager

Morning‌‌ ‌‌Update—Macro and Crypto Markets—May 11th

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