TA Tuesday: Market continues to move in tight windows while awaiting news

As of writing, $BTC is trading at $40,688 (+1.53% in 7 days), $ETH is trading at $3,038 (+0.37% in 7 days), and the ETH/BTC spread is trading at 0.07469 (-1.16% in 7 days).

Many Fed presidents will be speaking this week, and all have already shown a preference for a 50 basis point hike.

I believe the market has already priced this event, so I expect digital asset prices to continue moving in tight windows as a result of a non-event.

On the $BTC spot side:

The $BTC 1d Heikenn Ashi candles chart called a reversal on April 18th as the Open-Close spread is very small with Close and High – relatively high.

Major technical indicators, both oscillators and moving averages, are in favour of a sell.

Realised Volatility (RV) is – once again – in the lower 25th percentile for all measurement windows, and I see no reason for an impending peak.

The question is: how deep should Treasuries go down until this relationship stops holding, thus causing a rebound?

Looking at the Volume Profile Visible Range (VPVR)

Supports: $38k – $40k

Resistance: $47k – $50k

On the $BTC Futures side:

Open Interest (OI) is stable week over week as we are again trading at January 2022 levels.

BTC Futures Annualised Rolling 3mth Bases is trading 1.45% on the CME, as the Easter break and US dollar shortage did not materialise, and leverage continues to be out of the question.

Likewise, funding rates are quite negative across all the venues.

On the $BTC option side:

The term structure continued to steepen WoW, with the front-end trading at 50% implied volatility (IV), while the backend has not really moved.

The 25d skew is trading higher, as the risk reversal is in favour of the puts, with 6-month trading at 5%. In my opinion, this is too high, as I am still unable to argue the reason for a different long-term skew from 0.

The OI profile again suggests that $40k (support) will be a magnet as Call and Put are equally distributed, and that $50k is the resistance level.

 

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