Week in Review: Where’s the Volume?
It has been a slow grind higher for cryptocurrency prices. After four consecutive weekly declines, the market is showing signs of recovery, though tepid trading volumes are limiting gains across the digital asset class.
The stock-market picture brightened this week, as tech shares led the Nasdaq Composite Index to three consecutive record highs.
On the the political front, leaders from the Group of 7 nations touched down in Quebec, Canada on Friday for the first of a two-day meeting that could exacerbate growing trade tensions between the United States and its allies.
Cryptocurrencies Stabilize in Low-Volume Trade
Digital currencies stemmed losses this week, as bitcoin avoided a major technical reversal and the major altcoins stabilized following a month of volatility.
The total value of all cryptocurrencies rose by $15 billion over the past seven days, the first weekly gain in over a month. At the time of writing, the total market was valued at $342 billion.
Bitcoin successfully defended the $7,000 support level as the world’s largest cryptocurrency recovered near $7,600. The bulls are now eyeing a breakthrough of the $7,800 resistance for confirmation of further upside.
Among the majors, EOS and bitcoin cash were the biggest weekly gainers. Each currency added double digits compared with seven days ago.
Despite the gains, the crypto-market uptrend was severely limited by declining trade volumes. Daily market turnover ranged between $14 billion and $18 billion all week long, according to CoinMarketCap.
A Record-Setting Week for the Nasdaq
The technology sector carried the U.S. stock market higher this week, with the Nasdaq Composite Index notching three consecutive record closes.
Tech shares continue to outperform the broader market by a wide margin. The S&P 500’s information technology index has returned 13.5% this year, compared with 3.6% for the broader market.
The CBOE Volatility Index, commonly known as the VIX, touched its lowest level in over four months as calm returned to Wall Street. However, that optimism could be short-lived as the Federal Reserve eyes multiple interest rate hikes in the second half of the year.
G7 Summit Begins
Protests were underway Friday morning in Quebec as leaders of the powerful G7 nations began their two-day meeting.
U.S. President Donald Trump is outnumbered on key issues ranging from trade to environmental policies. Those differences came to light in a Twitter spat between Trump, French President Emmanuel Macron and Canada’s Justin Trudeau.
“Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers. The EU trade surplus with the U.S. is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow,” Trump tweeted on Thursday.
In a follow-up message, Trump called Prime Minister Trudeau “indignant” by invoking Canada’s long-standing relationship with the United States while failing to acknowledge the country’s unfair trade practices.
Trump will depart the G7 meeting early Saturday and quickly shift his focus to North Korea.
The Week Ahead
President Trump and North Korea’s Kim Jong-un will meet in Singapore on June 12 for high-level talks on denuclearization. The historic face-to-face meeting could signal the beginning of bilateral talks between the two adversaries in pursuit of a comprehensive peace treaty for the Korean peninsula.
On the same day, the U.S. Federal Open Market Committee (FOMC) will kick off its two-day policy meeting in Washington. On Wednesday, the Fed is widely expected to raise the benchmark interest rate for the second time this year. The official rate statement will be accompanied by a revised summary of economic projections covering GDP, unemployment and inflation.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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