Crypto Market

BTC and ETH Market Insight

The cryptocurrency market closed last week in red after a retreat from the rally weeks ago that pushed the market to a lower high. It was dragged down by the ongoing dramatic negotiations between Iran and the US, in which capital rotated to equity related sectors while BTC sags. The crypto market continues its underperformance and decoupling with the equity market after the 11 October incident. Bitcoin (BTC) was affected by the ETFs outflow from major traditional institutions like BlackRock, Fidelity and VanEck. The attempt of breaking out the resistance of 80K was dismissed after reports of Iran and the US engaging in a series of direct military exchanges.

Ethereum (ETH) followed BTC’s downward trajectory, weighed down by localized ecosystem pressures. A recent batch of ETH sales by the Ethereum Foundation, combined with a string of high level researcher departures, severely dampened sentiment. Despite Vitalik Buterin’s clarifying remarks on X outlining structural constraints and a strategic pivot to "sell less ETH" in the future, weak price action pushed the ETH/BTC ratio to a new Year-to-Date low amid continuous ecosystem capital flight.

A highly volatile month lies ahead as global markets enter a historic "super IPO month," headlined by SpaceX's June public listing on the Nasdaq. Because BTC and major altcoins share a massive correlation with Nasdaq risk appetite, an aggressive capital rotation may be inevitable as investors reallocate funds to chase the landmark tech offering, which aims to raise up to $75 billion. Beyond equity market drains, market participants must also brace for two critical mid-to-late June central bank events: the FOMC meeting featuring the release of the Summary of Economic Projections, and the BOJ interest rate decision.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

Over the past week, the mild downside pressure persisted with BTC and ETH both posting a negative return for the week. Nevertheless, implied volatility continued to ease across 1-week and longer tenors, with BTC 1W ATM IV declining further to around 32% and ETH 1W IV settling around 40.5%. Realized volatility stayed lower than implied levels (BTC RV ~29.6%, ETH RV ~40%), maintaining a modestly positive volatility risk premium. Skew remained bearish but showed some stabilization, with BTC 25Δ 1W skew at around 14.9 vol points and ETH 25Δ 1W skew moderating to ~10.6 vol points, indicating reduced intensity in downside hedging demand compared to the previous week. ETF netflows turned consistently negative for both BTC and ETH, reflecting waning institutional support.

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Macro

The major benchmarks finished the week higher in the holiday-shortened week: the DJIA edged up +0.90%, the S&P 500 added +1.43%, and the Nasdaq increased +2.39%. The Chinese stock market finished a mixed week: the Shanghai Composite Index fell 1.08%, while the CSI 300 edged up 0.97% and the Hang Seng index lost 1.65%.