09 Nov 2023
Week 45, 2023 - Weekly Market Outlook
The weekly market outlook article will provide a brief analysis of the past week's market performance and an outlook for the upcoming week.
Introduction
In this weekly market outlook, we examine the most recent updates in the crypto space. With an emphasis on Bitcoin and the recent macro environment, we analyze recent price action. We also go through the DeFi stablecoin flow and we rank the crypto market's gainers and losers. Finally, we evaluate the performance of the Flagship Portfolio Vault.
Macro
Recent discussions within the Bank of Japan (BOJ) have revealed a shift in their long-standing policy stance. Policymakers are considering phasing out their massive stimulus program and preparing for an eventual rise in ultra-low interest rates. This change in direction comes as they acknowledge the need to lay the groundwork for a sustainable exit from their easy monetary policy.
Simultaneously, the US dollar, which has been strong due to a robust US economy and rising Treasury yields amid Federal Reserve rate hikes, is showing signs of weakening. Expectations that the Fed may halt rate increases have contributed to the dollar's decline, making it less dominant compared to other major currencies.
This macroeconomic shift has implications for risk assets. A weaker dollar typically boosts risk assets as it makes them more affordable to international investors. Moreover, the potential easing of BOJ's policy could inject more liquidity into the market, further supporting risk assets.
Bitcoin
The 9th of November marks the beginning of a critical nine-day period for the crypto market, particularly for Bitcoin, as the U.S. Securities and Exchange Commission (SEC) enters its last window of the year to approve a series of spot Bitcoin Exchange-Traded Funds (ETFs). This window could potentially see the green light for all 12 spot Bitcoin ETF applications.
The anticipation surrounding this approval period has coincided with a notable breakout for Bitcoin, which has surged past the $35,000 mark, exiting a two-week price range. This movement suggests that investors are optimistic about the potential for these ETFs to receive approval, which could significantly enhance Bitcoin's accessibility to a broader range of investors.
Crypto best and worst performers
This week's top performer in the cryptocurrency market is ORDI. The ORDI token, linked to the Bitcoin Ordinals protocol, made an impressive 50% price leap just 24 hours after its debut on Binance.
Conversely, GameAI has faced a downturn, emerging as one of the significant losers this week. This decline is largely attributed to the exorbitant funding rates for holding long positions. The high funding rates have led to liquidations, which in turn triggered a substantial sell-off, adversely impacting its market position.
Stablecoin Flows
The total market capitalization of stablecoins has maintained its level at $125 billion. The Total Value Locked (TVL) of stablecoins in DeFi has been steadily climbing, growing by about $5 billion over the last 7 days. This growth has been the primary catalyst for the altcoin pump, indicating that further expansion in the stablecoin TVL could potentially lead to higher gains in the market.
Flagship Portfolio Vault Performance
Over the past 7 days, the share price of the Portfolio Vault went from 30.87 to 33.45, which is a 8.36% increase.
Our risk profile has remained bullish, primarily due the weakness of the dollar. This, combined with the growth of stablecoin Total Value Locked (TVL) and Bitcoin's sustained strength relative to traditional markets, informs our change in strategy.
If you’d like to access Flagship’s portfolio Vault, click here.
Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.
