As the week gets started after a strong move in US equities while the rest of the world remains a bit mired in mixed activity, crypto is making another push higher. BTC is attempting to hold over 60k after weekend strength, and ETH is poking at all-time highs once again. Recently, Robinhood disclosed that the number of users trading crypto on the free brokerage platform spiked to 9.5mm, up from 1.7mm at the end of 2020. Perhaps the fall from grace that many hot tech stocks took at the end of February and into March might have led many new retail traders, who have been cited as a significant factor in tech stocks incredible performance in the second half of 2020, as well as the emergence of the concept of the meme stock, have at least partially shifted their focus towards the crypto markets.
Macro risk sentiment is still fragmented around the globe, with the US mostly standing alone in a strong optimistic mood. China and Hong Kong markets are still exhibiting heavy selling, moving immediately lower last night after opening once again. Geopolitical tensions in the South China Sea as well as military buildup along the Russian Ukraine border. Vaccinations are still lagging in Europe and Brazil, and covid cases are starting to spike in India. While the US seems to be on quite a good path, there is still a lot of work to do across the globe. We’ll see whether the US market maintains its strength this week, and if optimism in this part of the world can help to quell market unease in other regions.
We’re approaching earnings season again, and focus in equity markets might shift towards the numbers that will start trickling in at the end of this week. Equity volumes have been on a steady decline for the last few weeks, though still elevated over levels from years past. I’ll be watching to see if volumes increase through earnings season, which would help give confirmation to the move higher in indexes. And as the week gets started, I’ll of course be closely watching crypto markets to see if they can sustain the moves higher over the weekend once liquidity picks back up during the work week. As of this writing, things are looking up, with only a brief dip around the time of the open of business in Europe. Crypto remained strong during the Asian market early selloff, which is encouraging. We’ll see if the US relative strength continues and propels prices higher still.
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