Market Commentary

MAY EMPLOYMENT — 172,000 NEW JOBS, MORE THAN DOUBLE CONSENSUS

The May jobs report surprised with 172,000 new nonfarm payrolls (consensus: 80,000–85,000). Unemployment steady at 4.3% for a third month. Wages +0.3% monthly and +3.4% annually — below inflation (3.8%), implying real purchasing power loss. March and April revised upward (+93,000 combined). Per Bloomberg, the strongest employment quarter in over two years. A resilient labor market is constructive for the economy, but reinforces Warsh won't cut rates at his first FOMC — strong employment + persistent inflation closes the door to easing.

GEOPOLITICS — CONFLICT EXTENDS TO KUWAIT AND BAHRAIN

On Wednesday June 3, Iran attacked Kuwait airport, Ali Al Salem/Arifjan bases, and the 5th Fleet in Bahrain. One civilian died, 63 injured. Kuwait: "criminal Iranian aggression." The U.S. responded on Qeshm Island. The extension to third countries elevates complexity but also increases incentives for resolution.

EQUITIES & OIL

S&P 500 -0.42% Wednesday — first negative equity reaction to the escalation. Brent ~USD 97.50/bbl. Markets partially recovered Thu-Fri. SPR recorded its largest weekly drawdown in history.

Bitcoin (BTC): Trades around USD 60,200. BTC lost the Short-Term Holder Realized Price support — historically the dividing line between consolidation and sustained drawdowns. However, the ~20% correction has cleaned excess leverage, creating a more solid technical base. The aggregate Realized Price (~USD 54,900) — the outright capitulation threshold — has not been breached. Support at USD 55,000–58,000; resistance at USD 63,000–65,000.

Ethereum (ETH): Trades around USD 1,575. Standard Chartered's Week 22 report remains relevant: Ethereum's internal metrics remain near ATHs despite the price decline, reinforcing the Amazon/dot-com analogy. Thursday, ETHA posted +USD 19.30MM — first inflow in >1 month. Support at USD 1,450–1,500; resistance at USD 1,700–1,750.

Solana (SOL): Trades around USD 63.00 (-24.3%). ETFs -USD 6.30MM, first negative week. SOL pulled back to March levels. Support at USD 58–60; resistance at USD 68–72.

Over USD 700MM in liquidations in 12 hours Wednesday. Across two weeks, >USD 2B liquidated — thorough cleansing that reduces the market's structural fragility.

Glassnode ("The Rally That Wasn't"): Realized losses reached USD 1.35B/day, with USD 770MM from LTH capitulating from cycle tops. STH Cost Basis (USD 76,400) fell below True Market Mean — first since Jan 2022. ETFs accumulated USD 4.21B outflows in 3 weeks. Key: BTC remains above the aggregate Realized Price (~USD 54,900) — the outright capitulation threshold has not been breached.

21Shares/Glassnode (Jun 4): Over USD 10B in shorts accumulated to ~USD 80K — significant short squeeze fuel. LTH assets +USD 15B YTD — capitulation is selective, not generalized.

Funding rates at year lows Wednesday, partial normalization Thursday. IV ~65%, but term structure flattening — market not pricing correction acceleration.

BTC: Third consecutive week above one billion in outflows, accumulating >USD 3,800MM in three weeks. Daily progression is key: -483 → -519 → -396 → +3.20MM Thursday. IBIT led outflows and recovery (+47.70 Thu). MSBT was the only fund with inflows across the first three sessions, suggesting institutional accumulation at these levels.

ETH: -USD 168.40MM, but Thursday ETHA posted +USD 19.30MM — first inflow in >1 month. Signals BlackRock allocators evaluating these levels as a re-entry zone.

SOL: First negative week (-USD 6.30MM) since Week 18. Wednesday concentrated outflows (-12.80MM).

Strategy sells 32 BTC: First sale since Dec 2022. USD 2.5M for STRC dividends. Still holds 843,706 BTC (0.004%). TD Cowen: "overblown." Simultaneously raised USD 128.3M in stock, pushing cash to USD 900M. Treasury operation, not thesis change.