Markets enter the new week with optimism priced in but not yet confirmed. Bitcoin has pulled back to $74,400 after completing last week’s bullish move, now testing a key level as it searches for direction.

This report breaks down the key dynamics shaping markets this week: a peace-driven macro narrative, improving but still fragile sentiment, and Bitcoin consolidating at critical levels with clear directional triggers for the next major move.

Let’s dive in 👇

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The US 2-year Treasury yield has quietly drifted back to meet the Fed funds rate at 3.50–3.75%. The message is simple: the bond market has stopped fighting the Fed. With the FOMC widely expected to hold at its April 28–29 meeting, the 2-year has found a floor, and any credible peace deal or labor market softening could reprice it sharply lower, fast.

That geopolitical sensitivity is nowhere more visible than in the Strait of Hormuz prediction market, which has swung violently all month. Iran declared the Strait open on April 17, sending odds spiking toward 60%, then closed it again within 24 hours after the US refused to lift its naval blockade, collapsing those odds back below 20%. The world's most critical oil chokepoint, carrying roughly a fifth of global seaborne crude, remains effectively shut. Every asset class in this newsletter is downstream of what happens here.

Markets have nonetheless voted for optimism. The S&P 500 hit a fresh record, fully erasing its war-shock losses, but the rally is dangerously narrow. Seven mega-cap tech names, led by Nvidia, Alphabet, and Broadcom, account for nearly 60% of all index gains since the March bottom, while most other stocks have barely moved. Energy is the one clear loser, down nearly 10%, as traders bet on falling oil. This is a peace trade dressed up as a bull market, and concentration this extreme means the index has little cushion if the trade reverses.

The dollar is telling the same story from a different angle. It surged earlier in the conflict as investors fled to safety and the Fed ruled out cuts into an inflationary energy shock, then began leaking lower as ceasefire hopes built through March and April. A weaker dollar is a meaningful tailwind for markets, and a full resolution could accelerate that rotation sharply. But as with equities, the move is built on hope, not a signed deal.

Every chart here is a variation on the same theme: markets have priced in peace, but peace has not arrived. Equities are at records, the dollar is softening, and rates are stable, all consistent with a world where the Hormuz crisis quietly resolves. But with reopening odds still below 20%, the Strait remains the single variable that matters most. The upside in a real resolution is significant. So is the snapback if talks collapse again.

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Sentiment has continued its gradual recovery. The Fear & Greed Index now sits at 26, still within fear territory but marking a meaningful improvement from the extreme fear readings that have dominated sentiment for much of this year. While the index has yet to break into neutral ground, the directional shift is encouraging and suggests that the worst of the panic may be beginning to subside.

The ETF flow data tells a similarly improving story, and in several respects a more emphatic one. After a soft start to the week on Monday, flows turned positive and held that way for every remaining session. The week's standout moment came on Friday, when inflows of $647M were recorded, the strongest single-day figure of the month. This late-week surge pushed total assets under management back up to approximately $100B, recovering ground that had been steadily eroded during the prior period of outflows.

Taken together, these data points reflect a market that is gaining tentative footing after a prolonged period of weakness. Sentiment is recovering, albeit slowly, and institutional flows are no longer just stabilising, they are showing conviction on select days. Whether this momentum can be sustained through the coming week, or whether it remains contingent on broader macro conditions, will be the key question to watch as the market attempts to build on this constructive close.

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A data-heavy week lies ahead, with markets looking to build on last week's constructive close and test whether the improving sentiment can be backed by supportive fundamentals.

Tuesday is the standout day on the calendar, with two key releases landing simultaneously. March Retail Sales will provide a timely read on consumer spending health, a critical input at a moment when growth concerns are elevated and any sign of demand softening could quickly weigh on sentiment. Alongside it, March Pending Home Sales will offer further insight into the state of the housing market under a persistently high rate environment. A strong double print on Tuesday could meaningfully reinforce the current risk-on tone; a disappointment in either could just as easily challenge it. Friday then closes the week with April Michigan Inflation Expectations data, which will be closely watched for any signs that consumer inflation perceptions are shifting. Given that rate cut expectations have become a key driver of market mood, any surprise in either direction here carries the potential to move markets into the weekend.

Layered on top of the macro calendar, approximately 15% of S&P 500 companies are scheduled to report earnings throughout the week. With equities having recovered meaningfully off recent lows, the bar for positive surprises is rising, and any disappointing guidance from major reporters could test the durability of the rally. Overall, this week offers the market its clearest opportunity yet to confirm whether the recent shift in tone reflects genuine stabilisation or remains fragile and data-dependent.

Bitcoin hit 78300 on Friday afternoon and fulfilled our bullish trading setup mentioned in Friday’s morning report. From there, price pulled back consistently over the weekend, and moved all the way back to the next lower support level at 74400 again on late Sunday. Btc is currently testing this level, looking for the next directional move from here.

The two-week liquidation heatmap shows leveraged positions clustered on both sides of current price. To the downside, liquidations concentrate around $70000, while to the upside they sit around $78,300, just above the weekend highs. The clusters at 70000 are more notable in size, but Moves in either direction are possible, and how traditional markets open today will be an important early signal.

Bullish Scenario: Bitcoin bounces off 74400 with conviction, this offers long opportunities targeting the 78300 technical level again, with invalidation if price moves below the entry level. If 78300 if reclaimed successfully, further longs arise targeting the next higher level at 84200. Should price first retest 72000 again, longs arise there targeting 74400.

Bearish Scenario: Bitcoin fails to hold $74400, with short entries valid on a confirmed bearish retest of that level, targeting $72000 and invalidated on a reclaim above it. A decisive break below $72000 opens further downside toward $65000, similarly invalidated on a reclaim of the broken level.

Looking at the bigger picture, TOTAL3 followed bitcoin precisely, reaching the next higher target of $743B on Friday before retracing over the weekend. It now sits at $725B, squarely between $743B resistance and $695B support, a range that has contained price since early February.

ETH/BTC peaked Friday as well before continuing its decline. By late Sunday it had reached the 0.03 level, which is now being tested as potential support. A hold here opens the door back toward 0.03255 and a period of relative Ethereum strength, a failure points to 0.0299 as the next target lower.

The picture is clearer than last week but not more encouraging. TOTAL3 is range-bound between two well-defined levels, and ETH/BTC is now testing support at 0.03 after a sustained downtrend. Bitcoin-first positioning remains correct. A break below 0.03 on ETH/BTC, and a corresponding TOTAL3 flush below $695B, would signal that altcoin weakness is structural, not temporary, and that rotation back into BTC and cash is the right move.

We hope this report provided you with valuable insights into the latest market developments and geopolitical shifts.

As always, stay informed, stay prepared, and have a fantastic week ahead! 🚀

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