Weekly Market Update
Liquidity & Economics — Week Ahead
This week is defined by inflation vs growth.
- NFP + Unemployment (Wednesday)
- CPI (Friday)
These are the primary volatility drivers for the week and will heavily influence rate-cut expectations and broader risk sentiment. Positioning aggressively ahead of Wednesday carries unnecessary risk. Patience is warranted until at least the first macro read.
Liquidity Conditions
US net liquidity remains broadly flat, but early signs of transition are starting to appear:
- Fed balance sheet: showing a slight uptick after a prolonged flat/contracting phase
- Treasury General Account (TGA): still elevated, acting as a liquidity drag
- Major global central bank balance sheets: modest upticks visible
This is not expansionary liquidity yet. However, it does suggest a slow transition from tight/contracting conditions toward a cautious pivot.
Markets are still pricing no more than two cuts this year, with expectations centered around June and September. This week's NFP and CPI will likely impact whether that path is reinforced or pushed out.
Regime framing:
We appear to be transitioning from tight → cautious. Any sharp deviation (hot CPI or weak labor) risks abrupt repricing across assets.
FX, Rates & Cross-Asset Signals
DXY
- Still range-bound within its broader macro structure
- Hovering near range lows
- Key signal remains:
So far, USD weakness has flowed primarily into equities and metals, not crypto. That divergence remains important to monitor.
Gold
- Bouncing from recent pullback lows
- Structure remains bullish on both daily and weekly timeframes
- Watching this week's reaction closely, especially if DXY weakens further
- Continued strength likely reflects ongoing geopolitical hedging and capital absorption
VIX
- Appears to be resolving lower after late-week spikes
- Volatility compression would support short-term risk stabilization
Equities Snapshot
US indices saw strong Friday rebounds after early-week sell-offs:
- DJI: pushing into all-time highs
- SPX: back near highs
- NDX: relative laggard, weakest of the major indices
- RTY: bounced with broader risk
Despite late-cycle characteristics, daily and weekly structures remain intact across indices. Tonight's open will be important to confirm whether Friday's strength holds.
A key inter-market signal remains active:
- NVDA vs SPX bearish divergence
Bitcoin & Crypto
Bitcoin experienced a major capitulation last week, marked by panic selling and heavy volume. That behavior supports the case for at least a local bottom.
- Macro structure remains bearish
- Capitulation occurred just above the Deep Value Bands
- Price currently below:
Deep Value Bands:
- Located roughly between $50k–$59k
- This zone is the primary area of interest for macro accumulation
- Price behavior into the zone will matter more than the zone itself
Short-term, conditions support a bounce / stabilization scenario:
- Extreme fear and volume already expressed
- Room for mean reversion in stablecoin dominance
- Likely path: stabilize → bounce → range
Any future capitulation into the Deep Value Bands, especially under calmer macro conditions, would be of high interest for long-term accumulation.
Key Bitcoin Levels (Keep It Simple)
- No bullish bias unless BTC reclaims:
- Weekly bands + yearly open (~$85k–$91k)
- Any bounce into that zone is a high-timeframe area to watch for continuation shorts
- Structural bullishness requires acceptance above $97k
- Until then, price is treated as counter-trend and reactive
As always, we let price action dictate bias, not narratives.
