It’s going to be an important week for the crypto market as several macro variables come into play all at the same time. All eyes are on the awaited release of inflation data and the results from the FOMC meeting—eyes are keenly set for any signals that could drive market sentiment through summer. The results of such an event probably determine the course for cryptocurrencies: it’s a tremendous and decisive week for traders and investors.
Key Macro Events and Their Impact on the Crypto Market
Top Macros in the Current Week: Game-Changing Events for the Crypto Market.
It’s a massive week for the crypto market; however, some macroeconomic narratives are set to dictate the course through the rest of the summer. On Wednesday, inflation data drops the same time the market digests the results of the FOMC meeting. Friday’s U.S. employment data leaves crypto investors much more cautious, particularly in altcoins. “For market sentiment to bounce back, a clear signal is needed from Jerome Powell, chair of the Fed, about how many rate cuts are precisely lined up for this year. “. Expectations for Powell, though, should perhaps be dialed back from “We read the inflation and labor market prints as mixed: We need to analyze and assess further: Chances of the next one being a hike are low: Need more data to cut.”
Historical Trends and Future Predictions for the Crypto Market
Background: Rate Cuts and Market Response Yes, indeed, investors usually expect rate cuts to be favorable to cryptos and other risk assets, but viewed in the empirical, that doesn’t hold up very well; if we’re reviewing charts of the US stock market after September 2000, July 2007, or July 2019, the reality is that they do fall at least or at least pull back around 10%, several months from the initial rate cuts.
None of these cases showed a boost in risk assets once the cuts started, but relatively, risk was increased in anticipation of these cuts, just as is the case now. For this reason, from these experiences, there is a rationality for adopting a diversified portfolio until the rate cuts occur and then hedging against easing.
Comparison with Past Markets
Comparison with Past Markets By skeptics, such an exercise in comparison with past stock market movements is probably regarded as unimportant. However, with the existence of crypto ETFs, such comparison is given an edge that becomes just as relevant.
Potential Market Scenarios
Potential Market Scenarios We’re teetering on the precipice of what could be an epic summer downturn or the beginning of the next round of fear-driven stimulus. If this week’s macro data isn’t market-supportive, we’re looking at the onset of a sideways trend that began in March. I am at 40% cash in my portfolio, waiting for better entry points on many names. Last Friday’s drop epitomized summer market action characterized by cascading liquidations, significant miner selling, and quickly waning bullish sentiment.
Even the most optimistic, considering people like Grachev and Hayes, are still exciting an alt season with buying opportunities. In reality, though, it has been the case, with the confluence of these conditions, probably, at least for the next two years. Still, through it all, Bitcoin has remained resilient, BNB is testing new all-time highs, and meme coins are continuing to the moon.
Current Portfolio Strategy
My portfolio gives me cause to be modestly positive and keeps me on an even keel. If Wednesday’s US data surprises, we could see market capitalization heading south. But I do not see myself going short futures here in anticipation of a decent correction. Ideally, it would be perfect to have another market upswing toward 76k in BTC; however, the longer we are on a sideways track, the better the chances are for facing the rise toward all-time highs at the end of summer. This explains the rising difficulty in catching short-term futures in such conditions, as in a range, more losses are made than gains. All the while, I am patient and complacent, waiting.
More analytics and forecasts can be found in OPINION and SNIPPETS
