Patience is a Virtue
The world of crypto moves fast, and for many traders the past 2 months have felt like molasses as prices stayed mostly range bound and moving averages caught up to current levels. While in the traditional asset space, talking about a several week wait for new highs seems like a pretty short time frame, crypto traders are an impatient bunch. This morning, that wait might be over. After battling with resistance at the 60k level for most of the day yesterday after coming close but not quite touching the all-time high over the weekend, BTC has made a decisive move to notch a new high over 63k during the early trading hours in Europe.
Equity markets are taking a pause today. After showing strength early in the session, Chinese equities sold off in the latter half of their day after the newly powerful antitrust regulatory body put 34 tech firms on notice, telling them they had one month to self-audit and implement changes to stop any anticompetitive behavior or face potential fines. This widespread focus has taken some of the tailwinds that Alibaba saw yesterday after the levying of a 2.8B fine, which was seen as a positive as it amounted to a lifting of a massive overhang of regulatory uncertainty and prevented the same relief from spreading across the rest of the Chinese tech sector. Meanwhile, investors are anxious about the fate of distressed debt manager China Huarong Asset Management. It seems we still have a lot of questions to clear up before risk sentiment in China might turn around.
US markets saw an early dip on news that the FDA and CDC recommended pausing administration of the Johnson & Johnson vaccine after 6 cases of blood clots were reported after vaccine administration. The recommendation was out of an abundance of caution, as nearly 7 million doses of the JnJ vaccine have been administered. The rate of this reaction for women taking hormonal birth control is about 1 in 100k, so seeing the same reaction in 1 in 1 million people receiving the JnJ vaccine, especially since all of the cases were reported in women age 18 to 48, seems to me to be likely expected and might have nothing to do with the vaccine at all. Unfortunately, even if the vaccine has no part in the appearance of the blood clots, the news might frighten some people and slow the pace of vaccination, which would be a negative for economic re-opening.
Markets swung back into positive territory after CPI numbers came out for March showing a slightly larger than expected increase in prices. The initial reaction to the data sent the dollar back down from the gains it saw after the JnJ news. The prospect of inflation has had mixed effects on markets over the last few weeks, initially causing a stir as traders saw inflation as a signal that the Fed would need to reduce liquidity support earlier than expected. This morning so far, the numbers seem to be taken as a positive, but we’ll see what the rest of the day brings us after US markets open.
All eyes on crypto this morning. 63k seems to be the next resistance level for BTC, but it’s all uncharted territory from here on out!
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