Last week, the cryptocurrency market saw a significant dip of 4.85%, from $1.195 trillion to $1.137 trillion. The downward trend in crypto markets continued throughout the week. A big spike was seen in ETH in the early part of the week owing to increased network activity, but that subsided soon, along with the rest of the crypto market. The US indices sustained through the week and ended with decent gains. The US CPI data was positive and led to a short-timed upside move in BTC and ETH, but the Core CPI data still remained a challenge, and a big pullback was witnessed in a few hours.
Price Analysis
On May 6, Bitcoin fell quickly from the resistance range of 30,000-$30,200, signaling that the bears are unwilling to allow the bulls through. A slight plus is that the bulls have been aggressively buying falls and attempting to defend the $27,812 resistance turned-support area. If the price falls below the $27,812 support level, it indicates that bears are attempting to take control. The BTC/USDT pair might decline to $26,500, then to $24,719. For the time being, we’re likely to approach the $26,500 level sooner or later.
A break and close over $30,200, on the other hand, indicates that the bulls have absorbed the supply. This might spark a surge to $32,500, where the bears are likely to stage another strong defense. The market is likely to be impacted by the US CPI data that will be released on May 10.
Fundamental Analysis
The US CPI data y/y was marked at 4.9% instead of the expected 5.0%. This caused moderate relief in the crypto markets, but the Core CPI m/m marking in hotter at 0.4% vs the expected 0.3% is a big issue that needs to cool down for the markets to feel confidently optimistic for an upside rally. BTC showed a slight rally to the upside, followed by a sharp drop in a few hours.
The PPI and Core PPI numbers are expected to mark at 0.3 and 0.2 on m/m basis. Any data higher than these expectations can cause a sharp drop in the already fragile market. Next week on 16th May, will see the release of retail sales and core retail sales, which will highlight the sentiments of retail participants in the economy. From current levels, the pullback can be expected to continue.
Bitcoin returns were -5.66% for this week. The Alpha Blue Chip Focused Strategy returns were -3.03% during the same period (4 MAY – 11 MAY). The Top Cap Digital Assets Strategy and Arbitrage Opportunities and Balanced Strategy returns were 0.4% and -0.96%, respectively.
