Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.
What’s happened
- Last Week: We saw some of the weaker 'soft' data begin to spill over into the 'harder' data, with Philly Fed employment being lower and New Orders and the Manufacturing Index down substantially. Alongside this, the Prices Paid were up significantly. Therefore, we have a very negative dynamic beginning to play out, which is an economic slowdown with rising prices and stagflation. Many assets do not perform well in this environment, particularly risk assets.
- Big Picture: risk assets are likely to continue to go lower as the FED remains on pause, and unable to cut whilst we're seeing inflation expectations rise due to the tariffs. The FED cannot cut rates into rising inflation expectations. They'll only do so when there's a material downturn in the economic data. This might look something like a negative Non-Farm Payrolls number, for instance.
What’s next
Markets are calm. But behind the scenes, a perfect storm of policy paralysis and rising inflation may already be setting up the next leg down.
Keep reading to see what assets we’re watching—and why.
What’s coming next week
- Throughout the week: there isn't any significant data out, so the markets focus will be on any new rhetoric out of the administration and any progress on trade deals. The hotter weeks, from a macro data point of view, are the first two weeks of May.
- Wild Card: Is any realistic progress made from the Trump administration on whether they legally can remove Chairman Powell from the FED? Most likely, this won't be able to happen. But, if the administration finds a way (a legal way) in which they can remove Chairman Powell, markets would likely puke lower on the announcement of this.
Levels we’re watching
- BTC: BTC is in the middle of the range here, with $82k as the key support and $88k as a key horizontal resistance. If $82k breaks, we're looking at the $65k to $74k zone to accumulate. If $88k breaks to the upside, we will reassess.
- Setup: We'll remain patient until BTC breaks its range. Our expectation is that it'll be to the downside. In terms of longer-term accumulation levels, we're eyeing the $65k to $74k levels as a zone in which we'll get aggressive with our buys. $74k to $78k, we'll consider small adds, but our major buying in size will be between $65k and $74k.
Cryptonary’s take
In the short term, it's possible that the rally can continue for BTC, but we feel that any upside is capped here, and therefore, price pulling back is the more likely outcome over the next week.
We're ultimately remaining patient here as the setup for risk assets isn't favourable whilst the FED remains on pause and there's substantial uncertainty around the Trump administration's policies. However, these current headwinds will eventually become tailwinds; clarity around trade policy, and a FED that can cut rates due to a slowdown.
This means lower prices in the short term, but lower prices we'll be able to buy up, and then have our positions supported by the tailwinds we mentioned above in the later part of this year and 2026.
BTC:
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