Is The Market Sentiment Changing?

Last week, the CPI figures were published in the US and were higher than expected (9.1%). The consensus in crypto twitter land was that the market will be trending south again. But as the market sentiment is very often difficult to anticipate, the opposite seems to be happening. Bitcoin price is steadily recovering and it’s now ranging above 23.5k. Last night, it has crossed a crucial level by breaking above 50 days moving average (MA 50) on a daily chart which may confirm an upwards trend.

The Ethereum confirmation last week that the long-expecting migration to Ethereum 2.0 will occur in mid-September, triggered a nice run for ETH as well as for other layers 1 and layer 2 chains. This move is also reflected in the Bitcoin dominance chart which is a measure of how much of the crypto market cap is composed of Bitcoin vs. other coins. Bitcoin dominance has weakened in the last few days and is down to 42%. (on June 12th during the 2d big crash – it was as high as 48.5%). The Fear & Greed index is recovering as well and is up to 30 ( at its highest in 2.5 months.

We are also monitoring the DXY which is a measure of the value of the U.S. dollar against six other foreign currencies. The dollar has shown real strength in the last months and was highly correlated with weak risk-on assets such as Bitcoin and tech stocks. The dollar is now facing resistance and we expect a reversal once the ECB decides to raise interest rates later this week. As soon as the Euro and other major currencies shows more strength, a positive momentum for risk-on assets may take place.
So there is a sense of relief in the markets, while not much has changed in the macro-economic conditions. We remain cautious and as always monitor the crypto as well as the economics indicators market carefully.

Diamond Pigs strategies are showing a strong positive trend with Berkshire (our passive index strategy) leading the trend with a 25.3% increase in the last 30 days. It is worth mentioning that Berkshire has suffered the most during the 2 big crypto crashes in May and June and it has still a lot of catch up to recover from its heavy losses in the last months.

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