02 May 2023
May Outlook: No blow-off top – yet
May is shaping up to become a volatile month.
Preview
In Short
May is shaping up to become a volatile month. Macro tailwinds still exist, but debt ceiling developments may cause turmoil. I am preparing for a blow-off top in the near term, while I also expect the 2nd batch of Silk Road BTC to reach the market in May, likely pushing prices lower. In sum, the factors mentioned above suggest growing volatility ahead - creating actionable opportunities as IVs trend toward yearly lows.
Takeaways
- Positives: No blow-off top yet. A final rate hike? Ongoing banking turmoil. A mesmerizing resemblance to 2019 recovery.
- Negatives: Debt ceiling. Silk Road BTC. DCG/Genesis.
- Action plan: Reduce exposure if we approach $40k. Accumulate if prices tumble towards H2, 22 range.
BTC reigns opaque, with both potential headwinds and tailwinds coming up in May. I am still neither a seller nor a buyer. Regardless, I will look to reduce exposure if prices move toward $40k and will resume accumulating if we revisit the H2 2022 range. Meanwhile, I flag the muted IVs in medium-term options as an attractive opportunity.
