【Market Commentary】Crypto assets are in a continued correction phase
On Friday, May 14, the U.S. market extended its gains as it continued the upward move from Thursday’s autonomous rebound. The Dow rose 1.06% from the previous day, the Nasdaq-100 and S&P 500 gained 2.17% and 1.49% respectively. The Philadelphia Semiconductor Index rebounded 1.50% on Thursday and climbed 3.02% on Friday. The Dow’s level this week hinges on whether it can test the closing high of 34,742.83 and the intraday high of 35,091.56 reached on May 10, just one week ago. Each would need to rise about 1.05% and 2.06% to achieve. The fear gauge, the VIX, ended last week below 20 at 18.81.
【Source】Trading View Dow Jones index daily
The Nikkei 225 rose back above 28,000 and, in U.S. time futures and CFDs, advanced near 28,300. It is currently hovering around 28,000. In the market briefing on Thursday, May 13, Tom Lee, a noted analyst at FundStrat, was quoted saying “the sharp spike in the VIX is actually a signal of upcoming stock strength.” Coincidentally, that prediction is turning out to be accurate for now. European stocks, too, appear to be in risk-on mode with major indices up over 1%. U.S. 10-year yields fell to around 1.62%. Gold continued its firm path as yields declined, rising from the mid-1,820s to over 1,850.
With the dollar weakening, the U.S. Dollar Index fell by about 0.3–0.5%, and EURUSD, using the dollar as the denominator, moved decisively. In the key dollar-weakness currencies, AUD, NZD, CAD, and GBP performed well. In particular, GBP/JPY is testing the upper range around 154, hovering near its recent highs. It is in a multi-year high zone, already surpassing the April 2018 high. Precious metals followed gold’s strength, while grain prices showed especially sharp declines in corn. Inflation fears remain in the market, and the FOMC minutes due Wednesday (the 19th) are highly anticipated.
Overall, cryptocurrency assets remain in a corrective phase. Bitcoin fell into the 44,000s, Ethereum dropped below 3,400, indicating stronger downside pressure relative to other major cryptos. Bitcoin Cash successfully completed its upgrade, but this asset also fell sharply, dropping below 1,080. The Bitcoin dominance rate sits at 41%, gradually making new lows. The total market capitalization of cryptocurrencies has fallen below $2 trillion, continuing a strong downward trend. Galaxy Digital, aiming to become a crypto investment bank, published a report last week titled “On Bitcoin’s Energy Consumption,” a counterpoint to Tesla CEO’s recent comment that Bitcoin is not environmentally friendly.
【Source】Galaxy Digital Energy Consumption Comparison
【Stocks with Trading Appeal】
Dow
GBP/JPY
Corn
Ethereum
【Notes on Market Commentary】
Please consider the following points as you read.
① Whether it is a transient thing
② Whether it will persist
Trader’s mindset
・“Explanations after events” are merely for reading; they do not affect forecasting ability or trading performance.
・The current market move cannot be fully explained in real-time.
・Even if you don’t know the direction, you can still profit.
・In markets where analysts and strategists say “go up,” you can profit on pullbacks or consolidations.
Traders can win even without knowing the market principles. Reports written by me, whose stance may differ from those who only provide market explanations or analyses without direct trading insights, may differ slightly in stance. Still, please accept that my writing will in some ways resemble general market commentary.
