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BTC rebounded last night to $95.2K after successfully retesting the $92.5K key support. However, the outlook for BTC remains bearish during early Asia session today after news of US government selling their stash of seized Silk Road BTC broke out.

Crypto prices continue to be weighed down by macro headwinds, as last night’s Fed Minutes revealed an increasingly hawkish stance. The Fed indicated that they will slow down the pace of rate cuts given that the risks of inflation have increased. Yesterday’s ADP employment survey also added to macro uncertainty, showing a slowdown in both private sector hiring and wage gains. This heavily contrasted with Tuesday’s JOLTS jobs openings which painted a stronger labour market.

On the options front, the curve has steepened across all tenors with Mar-Jun spread widening by 1.5 vols, and Jun-Dec spread rising above 1 vol. The desk continues to observe selling pressure on front-end vols with 17Jan ATM options priced 3 vols lower from last night.

With US markets closed today, we expect prices to remain weak as BTC consolidates between $92K and $95K. A break below $92K could bring the $90K figure into view.

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