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Topics covered:

• This Week’s Data.
• US-Iran War, Potential Escalations.
• Bitcoin’s Bid.
• Cryptonary’s Take.

This Week’s Data

This week’s key economic data is April’s jobs report. The forecast is for 73k jobs to be added and for the Unemployment Rate to remain at 4.3%, whilst Job Openings (for March) are expected to come in close to unchanged at 6.9m. Should the data come in as forecasted, markets will likely take it in its stride and quickly return to the narrative of the day/week, which is likely to be the continued positive Earnings growth for corporations, alongside AI and the capex investments, which have been driving the equity indexes higher. 

Should the data come in hotter, i.e., more jobs added and lower Unemployment Rate, markets will likely be fine with this, and they’ll continue moving forward. The downside risk to markets is if the data comes in extremely soft i.e., negative jobs (jobs lost) and a higher Unemployment Rate (although this’ll likely need to be 4.5% or higher to really worry markets), as this would put the Fed’s dual mandate in tension. However, markets may just treat it as one bad print, rather than a trend, so even if we were to see soft numbers, the market may react badly that day, but might shake it off by the next week’s open.  

Alongside the jobs data, we also have a plethora of Fed speak this week. Whilst we’ve recently had several hawkish dissents (Kashkari, Hammock, Logan), the majority of Fed members remain dovish, but not necessarily pushing for an interest rate cut anytime soon (other than Miran). Over the coming week (and even the next 1-2 months) we’ll be closely looking to see if there is a more significant transition toward hawkish commentary that sees interest rate hikes get priced into the market. For now, the market is pricing for interest rates to remain unchanged well into 2027, although the odds of a hike are greater than the odds of a cut in the first half of 2027, although both are dwarfed by the odds of rates remaining unchanged.

December 9th Fed Meeting - Rates Likely To Remain Unchanged

Our base case has been for the Fed to look through the potential inflation caused by the US-Iran war and higher oil prices. However, it is possible that inflation may start showing up more meaningfully in the ‘core’ components. This would result in the Fed not cutting rates this year, and remaining on hold, with the potential for a rate hike. This isn’t our base case (for a hike); however, our base case is shifting from 1 rate cut this year to rates remaining unchanged (no cuts). This is due to inflation potentially shifting into the ‘core’ components of inflation. 

US-Iran War, Potential Escalations

The US-Iran conflict remains in a fragile ceasefire (in place since around April 8) amid stalled but ongoing indirect negotiations, primarily mediated by Pakistan. Before this weekend, Iran had submitted a 14-point peace proposal to the US, calling for an end to the war, a reopening of the Strait of Hormuz, and a lifting of the US blockade. They also included the nuclear file, which is a softening in the Iranian stance. However,  President Trump said that he is ‘not satisfied’ (with the Iranians' 14-point peace proposal), implying a deal might not be reached, although he did caveat this by saying that talks have been ‘very positive’. 

This morning, markets were whipsawed on the news that Iran had struck a US warship with two missiles, as reported by Iran’s Fars News Agency. This came after President Trump had said over the weekend that vessels would be escorted through the Strait; however, it wasn’t clear if it was a digital escort or a military escort. But, US Central Command said that this Iranian strike on a US warship was a fabrication; ‘they made this up, it’s not true’. Brent Crude shot up on the news, although it has now given back some of its gains, despite remaining at $115/barrel. 

Brent Crude Oil Retests Local Highs This Morning on News of a US Warship Being Struck

A re-escalation, i.e., renewed US strikes on Iran, remains the biggest risk to markets as markets are somewhat priced for a deal to be done, hence the market narrative pivoted to the positive earnings growth that we saw from US corporations last week, which drove the equity indexes to new all-time highs. So, should we see a return to military action, it’s likely that markets would see a pullback. If there’s no deal and no return to military action, but the US blockade of Iran remains, this’ll likely result in higher oil prices eg. $120-$130/barrel, particularly with the rumours that Iranian oil isn’t getting out of the Strait, alongside the Iranians beginning to struggle with storage of this oil. This would lead them to halting production, fuelling higher oil prices. 

The US strategy of the naval blockade of Iran is an attempt to cut Iran off economically, pressuring them to make concessions at the negotiation table. But, should we see the conflict continue to play out (meaning the Strait remains closed for vessels), the likelihood of higher oil prices is high, which can result in significant inflation and lower economic growth. This is the downside risk to markets in the coming months, which is why we’re watching this conflict so intensely. Whilst we’re still bullish on the equity indexes (because earnings are growing at a significant rate - the largest YoY growth in 5 years), we believe markets are under-pricing a return to military strikes in the Middle East and the likely impact of that on risk assets. Although, we’d see a 3%-5% flush lower on the S&P 500 is a buying opportunity, should it materialise. 

Bitcoin’s Bid

Bitcoin’s breakout from the mid-$60k’s to $80k as of the early hours of this morning was driven by Spot buying and Shorts being liquidated. Last week, the Spot bid that we had seen previously had begun to slow down; however, it recovered meaningfully on Friday, with the ETFs seeing over $629.8m of inflows on that day alone. This negated the consecutive days of outflows that we saw in the week, leaving the net flow at the end of the week at +$162.8m. 

Last Week’s Bitcoin ETF Net Flows +$162.8m

This allowed Bitcoin to bounce from $75k, which aided the weekend push into the $80k level. 

On a more cautious note, the Coinbase Premium is no longer in positive territory. A positive Coinbase Premium has been a good indicator of higher prices for Bitcoin, with the opposite also being true. 

Coinbase Premium Down Trends to Negative

However, it’s possible that in the first two weeks of May, Michael Saylor returns as the marginal buyer. This would likely see the Coinbase Premium return back to positive territory. As of this morning, Bitcoin moved into $80k; however, it has rejected from that level, and it now sits at $79,700. The $78k - $83k zone remains a significant resistance zone for Bitcoin with the Short-Term Holder Cost Basis (@ $79,350), the True Market Mean (@ $78,100), the 2024 Yearly Cost Basis (@ $81,000), and the 200D moving average (@ $83,530). Until price can reclaim these levels and begin using them as supports, rather than resistances, this should be considered a bear market rally. But generally speaking, the capital inflows into Bitcoin have been constructive recently. Treasury companies have bought more than 500% of the daily mined supply that comes to market. This has historically seen prices continue to drive higher. 

Public Bitcoin Treasury companies added 65k BTC ($4.9b) in April, the deepest monthly accumulation of 2026, per BitcoinTreasuries.net.

Bitcoin Institutional Buying - Capriole

Considering Bitcoin is moving into some key on-chain resistance levels, the underlying dynamics remain supportive. As long as this continues, and we don’t see a major escalation in the Middle East, Bitcoin can have a positive week and potentially retest the upper bound at $82k/$83k; however, there is a lot of work still to do. Should Michael Saylor (Microstrategy/STRC) become a significant buyer again this week and next, that might be the marginal difference that sees Bitcoin reclaim its key on-chain cost basis. But we’ll repeat, there’s still a lot of work to do, and historically (in prior bear markets), Bitcoin has rejected into these key cost basis levels.

Cryptonary’s Take

For Bitcoin, the underlying drivers for price are constructive, and should we see a bid from Saylor this week (he’s hinted at it in X posts), this may be enough to see Bitcoin retest the upper bound of its key on-chain cost basis levels ($83k/$84k). 

This may be a move we see over the next 1-2 weeks. Beyond that, we expect the Iran-US war to escalate more significantly, which could catalyse a short-term pullback for risk assets, with more significant problems materialising because of that potential escalation, i.e., higher oil prices, higher inflation, and significant growth slowdown.

Because the underlying flows are constructive, we expect to see slightly higher prices, but we remain sceptical of the rally going significantly beyond that. 

Key Dates Ahead:

• 8th May: Jobs report.
• 12th May: Inflation report.