In the past 24 hours, Bitcoin (BTC) experienced a modest 1.5% increase, reaching a value of approximately $27,410, while Ethereum (ETH) remained relatively stable at around $1,820.

 

ETH has been able to narrow its underperformance relative to BTC to 11% despite the overall low trading volume. One possible factor contributing to bullish investor sentiment for ETH is its deflationary status, as the token supply has been contracting. However, both BTC and ETH are currently trailing behind traditional financial assets in terms of performance and momentum over the past 10 days, as indicated by Relative Rotation Graphs. Technical analysis of the ETH/BTC chart suggests a potential stall in prices, given historical data showing BTC’s historical outperformance over ETH. Currently, the ETH/BTC pair is trading 40% below its peak in 2018, and recent trends indicate a possible return to its 20-day moving average.

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In regulatory news, the US Securities and Exchange Commission (SEC) has requested Grayscale to withdraw its application to make its Filecoin Trust product a reporting company. This would have necessitated quarterly and annual reports. The SEC’s rationale for this request is that Filecoin (FIL) falls under the definition of a security. Grayscale, however, disagrees with this classification and plans to promptly respond to the SEC’s comment letter, presenting its legal position. This interaction highlights the SEC’s heightened scrutiny of crypto tokens and their classification within US securities law. Grayscale has previously disclosed similar issues regarding its trust products for other cryptocurrencies such as Stellar‘s XLM, Zcash‘s ZEC, and Horizen‘s ZEN.

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In other news, Tether Holdings, the company behind the largest stablecoin, has unveiled its strategy to diversify reserves by investing up to 15% of its profits in Bitcoin. This move comes as Tether aims to broaden its portfolio beyond the minimum assets required to back its stablecoins. Currently, Tether holds around $1.5 billion worth of Bitcoin as part of its reserves. Going forward, Tether will internally store and manage its Bitcoin holdings, eliminating the need for external custodial or banking partners. Tether emphasizes that the value of its Bitcoin holdings will not surpass its shareholder capital cushion, which currently stands at over $2.5 billion. Tether‘s reserves, as of March, included approximately $69.3 billion in cash and cash-equivalent assets, a significant portion of which was invested in short-dated US Treasury bills. The rising yields on these bonds have proven advantageous for Tether, potentially generating substantial earnings from its holdings.

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Bitcoin (BTC) $27385 (-0.06%) – Neutral Outlook

 

Based on the analysis of different timeframes, the 1-day (1D) chart recently formed a significant market structure called mSOW (minor Sign of Weakness). However, the subsequent rebound displayed a long wick, suggesting potential resistance. On the 4-hour (4H) chart, there was a formation of UA (Upthrust Action), which typically indicates the possibility of a double-top pattern preceding a correction. Additionally, the 1-hour (1H) chart revealed a smaller accumulation pattern that supports the 4H theory of BTC retest in the range of $27538 – $27660. Considering these observations collectively, it is anticipated that the 1D mSOW (26795-25818) will be retested before a surge towards the level of 31015 commences.

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Overview:

  • Closest hourly support zone: 27265 – 26970
  • Closest hourly resistance zone: 27538 – 27660
  • Key Level: 27885 (4H 200EMA)

Hourly Resistance zones

  • 27538 – 27660
  • 27790 – 28020
  • 28153 – 28420

Hourly Support zones

  • 27265 – 26970
  • 26795 – 26570
  • 26310 – 25818

Asian Equities Poised for Gains as US Stocks Rally on Debt-Ceiling Talks; Biden’s Assurance Fuels Market Sentiment

Asian equities are poised for gains as US stocks rallied on positive signals from debt-ceiling talks, allowing investors to shift focus to interest rates and the banking system’s health. Futures contracts for Japanese, Hong Kong, and Australian stocks have risen more than 1%, while US futures remained steady after the S&P 500 and Nasdaq 100 closed near their daily highs with over a 1% increase.

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Investors found confidence in President Joe Biden’s expressed assurance that there will be no default, along with House Speaker Kevin McCarthy’s belief that an agreement can be reached this week. Furthermore, JPMorgan Chase CEO Jamie Dimon and other bank leaders met in Washington to discuss the debt limit, indicating a favorable outlook on avoiding a default.

 

As a result, Australian and New Zealand bond yields climbed while US two-year and 10-year Treasury rates rose to 3.56%. The dollar index stabilized at its highest level since March, suggesting a positive sentiment in the currency market.

 

In addition to the debt-ceiling talks, attention is also on upcoming economic data and events. Australian employment data is expected to show a decrease in jobs created in April compared to March, with the unemployment rate remaining at 3.5%. The Philippines is forecasted to maintain interest rates at 6.25%, while New Zealand’s finance minister will present the country’s budget with economists predicting a return to surplus in 2026, one year later than previously projected.

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The recent rally in regional banks, following Western Alliance Bancorp’s report of deposit growth, has boosted market sentiment and alleviated concerns about the banking sector’s health. The KBW Regional Banking index witnessed a 7.3% surge, marking its best day since January 2021.

 

However, not all sectors experienced positive outcomes. Cisco Systems Inc. faced a decline in stock price after releasing its third-quarter results and outlook, as some weaknesses were observed in underlying numbers. Investors are now awaiting earnings reports from Alibaba Group Holding Ltd. and Walmart Inc., which are scheduled to be released soon.

 

Meanwhile, European Central Bank Vice President Luis de Guindos stated that the bank has mostly completed its tightening measures, although there is still progress to be made.

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