With some idiosyncratic crypto catalysts coming forward, macro events can have a big impact on prices in the short term. The macro situation in the US and the Middle East appears to be improving. Crypto traders will be keeping a close eye on Wednesday's timing. Inflation printing.
Crypto investors should not shy away from buying the dip.
That's according to Quinn Thompson, founder of hedge fund Lecker Capital, which specializes in using macroeconomic analysis to invest in crypto.
“Find a way to remove emotion and position about what the market is going to care about next month (Fed liquidity), not last month (recession/growth scare),” Thompson said. has been posted On X.
“The market is a bit asleep at the wheel here,” he added.
Inflation and the Fed
Last Monday's bloodbath was caused in part by fears that the Federal Reserve had kept financial conditions too restrictive for too long and that the US was on the verge of entering a recession.
That is Wednesday's Consumer Price Index report There is an opportunity to focus This week, according to Coinbase analysts David Duong and David Han.
Investors are looking for signs that inflation is slowing, which would further confirm that the Federal Reserve is finally ready to cut rates.
“Absent idiosyncratic catalysts for crypto over the next few weeks, we expect macro dominance to continue,” the Coinbase report said.
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By keeping interest rates high, the US central bank is encouraging investors to buy government bonds to earn a solid risk-free return.
When interest rates are low, investors seek returns in risk-on assets like bitcoin and tech stocks.
Investors have assigned 100% odds that the Federal Reserve will cut rates in September. FedWatch data45% chance of seeing an aggressive 0.5% cut.
“We are in an environment of slowing growth and tight monetary policy, a major headwind,” Thompson said.
I do not expect we will see further weakness as the economic environment changes, he added.
Conflict in the Middle East
Thompson also dismissed fears of an escalation of conflict in the Middle East.
“There seems to be a reluctance to buy back ahead of the potential for war” between Israel and Iran, he said Said. “The problem with this view is its consensus and all the headlines.”
Thompson argued that Iran would prefer Vice President Kamala Harris to win this year's election instead of former President Donald Trump — because sanctions were reimposed on Iran during his tenure.
“It's not in their best interests to start a large-scale war and drive up oil prices,” Thompson said.
Tom Carreras is a market correspondent at News. Got a tip about crypto and macro? Reach [email protected]
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