As we expect, Fed Chair Powell has turned less hawkish once the US Midterm elections were out of the way. In anticipation of this dovish shift, we suggested a month ago that the US Dollar (USD) would peak out and with it, interest rate expectations. Indeed, the USD has already declined by -8% and is sitting on the 200-day moving average support line – a level that many traders use to determine if an asset is in a bull (above) or bear (below) market.
When the USD is in a bear market, risk assets tend to rally as a weaker USD tends to open the liquidity floodgates – especially if bond yields are declining as well – as has been the case with the benchmark 10-year US bond yield. Hence, our expectation that a weaker greenback would support crypto prices and with declining inflation expectations – as Chair Powell admitted this week, macro would become a tailwind for risk assets and crypto.
Historically, (US) stocks and crypto have a strong relationship with each other. Without the FTX implosion, Bitcoin might have been trading at 29,000 by now – instead of 17,200 (or +69% higher). But with a supportive macro backdrop, those levels might be achieved in 2023.
The dispersion within tokens has been exceptionally high last week. For example, Huobi rallied +40% after Huobi Global announced it would airdrop a new token, the ‘Dominica coin’ or DMC, as the world’s first national token. Dogecoin also rallied +33% upon speculation that Elon Musk and Vitalik Buterin are collaborating on upgrading the meme coin.
Please continue to follow Apexto’s blog! Don’t miss a chance to keep yourself up-to-date in the crypto market.
Our Reputation is Your Guarantee!
Other websites with similar names may try to confuse you to think we are the same. Shenzhen Apexto Electronic Co., Ltd has been in the Blockchain mining business for more than seven years. For the last 12 years, Apexto has been a Gold Supplier. We have all kinds of ASIC miners and GPU cards on sale, including Bitmain Antminer, WhatsMiner, Avalon, Innosilicon, Ebit, StrongU, PandaMiner, iBeLink, Goldshell, and others.
Join us: https://t.me/apextomining
Liked this article? Share it with others: