1 Minute Market Rundown – 14th June 2022
Celsius Insolvent?
Risk Clattered
All Eyes on Powell
It was crypto that led the charge down both yesterday and over the weekend, with ETH at the vanguard. BTC had its worst single day performance in a year, while ETH slumped 18% over further concerns around its proposed merge.
News on the day of Celsius’s insolvency exacerbated the correction seen in all markets, while more reports of staff cutbacks from the industries biggest players and a brief panic around Binances liquidity pushed the crypto market down further.
Adverse news events are the backup dancers to the main show though, with macro headwinds continuing to plague crypto. Monetary tightening is squeezing the market, with M2 finally starting to shrink. Risk assets across the industry were dealt similar treatment. Eyes will be on the key liquidation levels today: 1,075 in ETH, 0.8 in stETH/ETH and 20,000 in BTC. With frontend skew massively to the downside in BTC, the contrarian trade could be the order of the day. A bear rally could see BTC back up to 26,600 but catching a falling knife will always be a risk.
In traditional markets, the desk remains nimble. ‘Turn Around Tuesday’ has historically been fruitful for equities and any sniff of a relief rally will have the market jumping on good assets at discount prices. Any rally is likely to be unsustained until Powell has spoken later in the week though. EUR/GBP will be targeting a breakout above its recent narrow range, a long position that can be balanced nicely by selling any EUR/USD rallies towards 1.0530. Medium term, the hope is that the capital markets have begun to do the Feds work for them and we start to see more dovish rhetoric. USD/JPY is at historic highs and fears of recession coupled with softening rate hike expectations could bring it into correction territory.
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