In today’s report, we delve into the implications of these developments on the crypto market, analyze the latest Bitcoin price action, and highlight the technical, macroeconomic, and on-chain factors shaping the current landscape.

Here’s what we’ll cover today:

Let’s dive in!

The latest Bloomberg survey of economists paints an optimistic picture for the U.S. economy over the next 12 months. A majority of economists now expect the economy to continue expanding, with June survey respondents showing the highest confidence levels. 

Notably, very few economists are predicting an outright recession, with most expecting either continued growth or at worst a period of zero to negative growth that falls short of a full recession.

This represents a significant shift from earlier pessimistic forecasts and suggests growing confidence in the Federal Reserve's ability to engineer a soft landing.

Middle East tensions have created significant market disruption across multiple asset classes. Oil prices have surged dramatically on the Israel-Iran conflict, with generic crude futures jumping from around $60 per barrel in early May to over $75 by mid-June, a 25% increase in just weeks.

This sharp move reflects market concerns about potential supply disruptions from one of the world's most critical energy-producing regions.

Gold markets have responded predictably to the geopolitical uncertainty, with both price momentum and volatility spiking. The precious metal's 25-delta call skew has turned sharply positive, reaching levels above 2.00 - the highest since early 2024.

Simultaneously, gold ETF implied volatility has jumped to over 20%, indicating heightened demand for portfolio protection.

The crypto fear and greed index currently paints a promising picture, with the latest reading at 50, perfectly neutral, despite prices trading just below all-time highs and at elevated levels. This continues to support the thesis of sustained upside momentum and a healthy expansion ahead, without suggesting that we’ve reached alarmingly overvalued levels just yet.

Total Bitcoin spot ETF net inflows have remained positive throughout the past week. Even with the escalation in the Middle East, this stands as another bullish signal and reinforces the view that the current bullish trend is ongoing and the market cycle is still developing.

Perhaps the most striking development has been Bitcoin's resilience relative to traditional risk assets. The volatility-normalized return analysis reveals a dramatic divergence: while the S&P 500's risk-adjusted performance has collapsed to -37.36, Bitcoin maintains a positive reading of 17.04.

This 54-point spread represents one of the largest performance gaps between the cryptocurrency and equity markets.

The chart shows this divergence began in late February and has persisted through the recent geopolitical turbulence. Bitcoin's ability to maintain positive momentum while traditional stocks struggle suggests the cryptocurrency is increasingly viewed as an alternative store of value rather than purely a risk asset.

This behavioral shift could have significant implications for portfolio construction, particularly during periods when traditional asset correlations break down.

Key events next week include the NY Fed Manufacturing Index on Monday (June 16). On Tuesday (June 17), we’ll see U.S. Retail Sales and Industrial Production data. Wednesday (June 18) is the major focus, with a packed schedule: Jobless Claims, Building Permits, Housing Starts, the Fed Interest Rate Decision, FOMC Statement, FOMC Economic Projections (Dot Plot), and the FOMC Press Conference with Jerome Powell. Thursday (June 19) marks the Juneteenth holiday with markets closed, though Initial Jobless Claims will still be released. The week wraps up on Friday (June 20) with the Philly Fed Manufacturing Index. 

The key spotlight is clearly on the Federal Reserve announcements on Wednesday. Market expectations are heavily skewed toward a hold decision, with all but two of the 105 economists in the June 5-10 Reuters poll predicting the Federal Open Market Committee would keep the fed funds rate unchanged at its June 17-18 meeting in a 4.25%-4.50% range. This represents overwhelming consensus that the Fed will maintain its current stance after holding rates steady since the beginning of 2025.

The Fed has been in a holding pattern following its rate-cutting cycle that began in late 2024. The Federal Reserve kept its benchmark interest rate unchanged in May, holding the line at 4.25% to 4.5%, much like it did at the March meeting.

The Bloomberg World Interest Rate Probability rate projections reveal a more aggressive easing cycle ahead. Comparing the June 13th rate projections (black line) to the January 2nd forecasts (blue line), the expected rate path has significantly lowered. While January projections showed rates declining gradually to around 3.7% by early 2027, the updated June forecast suggests rates could fall to approximately 3.1% over the same period.

This 60 basis point difference indicates the Fed may see more room to ease monetary policy, likely due to reflecting confidence that inflation pressures are moderating faster than previously anticipated.

Now that we’ve covered the key macro drivers and current sentiment shifts, it’s time to zoom in on what really matters for traders this week: Bitcoin’s price action.

In the following section, we break down the current technical setup and share our trade scenarios for both the bullish and bearish case.

Price is at a pivotal level, and the next move could unfold fast.

Bitcoin lost crucial support around 106,100 on Thursday and quickly sold off, though it did not reach our next level of interest at $102,000, and gradually moved back up to 106,100. We saw two rejections at that level, which allowed us to enter short positions, but in both cases, the sell-off lacked strength and failed to hit our 102,000 target, leading to break-even stop-outs. No losses were taken.

This morning, Bitcoin reclaimed the 106,100 level and is now trading higher, starting the week strong and currently sitting at 107,000.

The Bitcoin two-week liquidation heatmap currently shows major clusters of leveraged liquidations on both the upside and downside, with the upside cluster just above all-time highs at 112,000 standing out as more significant.

The presence of remaining liquidation leverage around 100,000 suggests that moves in either direction are still possible, though there’s a slight bullish bias.

Bullish Scenario: In a bullish case, we want to see Bitcoin hold above the key 106,100 level and ideally push higher toward 109,300, with potential for a move into the liquidation cluster above all-time highs around 112,000. Bullish trades can be taken on a successful retest of 106,100 targeting 109,300, or after a flip of 109,300 targeting 111,900 for continuation. In both scenarios, the trade is invalidated if price fails to hold above the respective entry level.

Bearish Scenario: In a bearish case, Bitcoin fails to sustain above 106,100 and drops below it again. Short setups become valid on a successful bearish retest targeting the key level at 102,000. As seen last week, taking profits quickly remains prudent, as both recent short entries failed to reach full target. A partial take-profit area is at 104,600.

When tracking TOTAL3, the crypto total market cap excluding BTC and ETH, the collective altcoin market still appears to lack a real catalyst or decisive driver to spark a fresh rally that is sustainable enough to outperform Bitcoin over a prolonged period, similar to the altcoin seasons seen in previous cycles like 2017 and 2021.

Notably, technical developments show that the recent sell-off last week did not result in a fresh lower low, which is a bullish sign and may suggest that the down phase we’ve experienced since early May could be nearing its end, potentially setting the stage for a fresh leg higher aiming to challenge resistance around $930B. High caps remain the preferred play for now when it comes to altcoin allocation, as we are not yet leaning toward increased risk exposure by diving deeper into lower cap altcoins or ICOs.

Stay tuned for Wednesday’s Altcoin Market Report, where we dive deep into charts and metrics, collecting data and insights to determine when the right time may come to fully shift focus back to altcoins and higher-risk opportunities.

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

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

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