• Latest
  • Trending
Crypto Surges as Fed Recognizes Disinflation

Crypto Surges as Fed Recognizes Disinflation

February 1, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

US SEC Alerts Investors On Crypto Asset Securities – Dogecoin & … – NewsWatch

March 26, 2023
DOGECOIN AND SHIBA INU TO THE MOOOON!!!!!! #dogecoin #shibainucoin

DOGECOIN AND SHIBA INU TO THE MOOOON!!!!!! #dogecoin #shibainucoin

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Will RenQ Finance be as Big as Cardano (ADA) and Ethereum (ETH)? – Analytics Insight

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Altcoin Season On Horizon: How Bitcoin and Ethereum Are Poised to Perform – Coinpedia Fintech News

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

How Blockchain gaming expanding into Metaverse: 8 key features explained – OTV News

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

dAppstore (DAPPX) Rises 30.19%, Outperforms the Crypto Market Saturday – InvestorsObserver

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

ZKSYNC launches Alpha Mainnet ‘Era’ in Hope of possible Airdrop … – Tekedia

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Ethereum holders might be elated to know this about exchange balance – AMBCrypto News

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Under-the-Radar Web3 Altcoin Erupts 140% This Week Amid $40,000,000 Fundraising Round – The Daily Hodl

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Litecoin Price Prediction as LTC Rallies 38% From Recent Bottom – Can LTC Reach $100 in 2023? – Cryptonews

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Will TMS Network outshine among Cardano & Uniswap? – CryptoNewsZ

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Cubs Spring Training Notebook: Ripple effects of rotation decisions … – Marquee Sports Network

March 26, 2023
Sunday, March 26, 2023
EGROW ONLINE
  • Home
  • Cryptocurrency
  • Bitcoin
  • Ethereum
  • Blockchain
  • Altcoins
  • ADA
  • Litecoin
  • Dogecoin
  • ICO
  • Ripple
  • Market & Analysis
  • Videos
No Result
View All Result
EGROW ONLINE
No Result
View All Result

Crypto Surges as Fed Recognizes Disinflation

by admin
February 1, 2023
in Altcoins
0


Cryptocurrency prices lurched higher on Wednesday in wake of more dovish than expected remarks from Fed Chairman Jerome Powell, who was speaking as usual in the post-Fed policy announcement press conference. Risk assets, including stocks, surged as Powell acknowledged that the central bank has made progress in its fight against inflation and said that the “disinflation process has started”.

Powell’s comment came shortly after the Fed announced a widely expected 25 bps hike to the Federal Funds target range to 4.50-4.75%. Bitcoin was last trading close to $23,700s, now up around 2.7% on the day and up closer to 4.0% versus its prior post-Fed lows in the $22,700s.

Ethereum was last up an even more impressive over 3.5% on the day in the $1,640s. The world’s second-largest cryptocurrency by market capitalization is now threatening an upside break of a short-term pennant structure that would open the door to a quick run higher towards resistance in the $1,800 area. Meanwhile, major altcoins like Cardano, Solana, Polygon and Polkadot are all up 4-8% versus their pre-Fed policy announcement levels.

Powell Passes Up Chance to Send Markets Lower

Powell had the chance to push back against the recent easing in financial conditions (i.e. the January move higher in stocks and crypto and lower in the US dollar and yields). However, he said that the Fed’s focus was on longer-term economic trends, not short-term market moves.

Many strategists had been warning prior to today’s Fed meeting that Powell might look to ramp up the harsh commentary in order to dampen “animal spirits” in the market, based on the assumption that the Fed doesn’t want a premature easing of financial conditions to make their job of getting inflation back to the 2.0% target more difficult.

As it happened, harsh words designed to trip up the market were not there, hence the bounce in assets like crypto. However, in its statement, the Fed said that ongoing rate increases were still needed and a “couple” more hikes would likely be warranted. That might be at odds with the market’s base case assumes that there will be just one more 25 bps rate hike (in March) before the hiking cycle is over.

Either way, crypto now seemingly has the green light to rally in the short term. Short positions thus remain at risk, having been obliterated over the last few hours in wake of Wednesday’s post-Fed rally across the crypto space. Coinglass.com data demonstrates short-position liquidations spiking in wake of the Fed meeting, suggesting that a short squeeze could continue to support the market.

But Can Crypto Rally if the US is Headed for Recession?

It’s all smiles amongst crypto investors on Wednesday. But the post-Fed rally could quickly come unstuck. Big tech giants including the likes of Meta Platforms, Amazon, Apple and Alphabet are all reporting earnings over the next two days. And Q4 earnings out so far for S&P 500 companies have generally pointed towards the same thing – an earnings recession.

That’s because the US economy is rapidly stagnating, largely as a result of the lagged impact of the Fed’s aggressive hiking cycle of 2022. The consensus amongst macro analysts is that the US economy will have fallen into recession sometime within the next few quarters. Popular macro analyst Alfonso Peccatiello recently outlined in an in-depth Twitter thread as to why he expects a recession in four to five months.

Essentially, lead economic indicators including the Global Credit Impulse, the Conference Board’s Leading Index, the Housing Market and Philly Fed New Orders Index are all pointing in this direction. A US recession means that the earnings recession for corporate America is likely to get worse.

There is a risk that this prevents stocks from benefitting from any optimism about a less hawkish Fed. And crypto has generally been closely correlated to stocks in the last few years. The question for investors is thus whether crypto can weather a US recession, even if economic weakness does force the Fed into a harder dovish pivot.

Looking at the experience of the last few years, the answer might be yes. The pandemic lockdowns of 2020 sent the US economy into a short but deep recession. After an initial sell-off amid the panic caused by the spread of Covid-19, crypto came back stronger than ever as the Fed axed interest rates to zero and the US government began unprecedented fiscal stimulus.

Every cycle is different. The Fed is unlikely to axe rates to zero as fast as in 2020. And the US government doesn’t have the ability to press ahead with the kind of stimulus it did in 2020 and 2021. But an easing of financial conditions in 2023 could well underpin crypto, even if a US recession means that we don’t get as aggressive of a bull market as in late 2020/2021.



Source link

YOU MAY ALSO LIKE

Under-the-Radar Web3 Altcoin Erupts 140% This Week Amid $40,000,000 Fundraising Round – The Daily Hodl

Crypto Trader Maps Path Forward for Aptos and Chainlink, Predicts Altcoins Will Fly Once Bitcoin Cools Off – The Daily Hodl

Tags: CryptoDisinflationFedrecognizessurges
ShareTweetPin

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search

No Result
View All Result

Recent News

Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

US SEC Alerts Investors On Crypto Asset Securities – Dogecoin & … – NewsWatch

March 26, 2023
DOGECOIN AND SHIBA INU TO THE MOOOON!!!!!! #dogecoin #shibainucoin

DOGECOIN AND SHIBA INU TO THE MOOOON!!!!!! #dogecoin #shibainucoin

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Will RenQ Finance be as Big as Cardano (ADA) and Ethereum (ETH)? – Analytics Insight

March 26, 2023

Recent News

Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

US SEC Alerts Investors On Crypto Asset Securities – Dogecoin & … – NewsWatch

March 26, 2023
DOGECOIN AND SHIBA INU TO THE MOOOON!!!!!! #dogecoin #shibainucoin

DOGECOIN AND SHIBA INU TO THE MOOOON!!!!!! #dogecoin #shibainucoin

March 26, 2023
Altcoins Lead Post-Fed Crypto Rally as Risk Appetite Increases – Yahoo Finance

Will RenQ Finance be as Big as Cardano (ADA) and Ethereum (ETH)? – Analytics Insight

March 26, 2023

Categories

  • ADA
  • Altcoins
  • Bitcoin
  • Blockchain
  • Cryptocurrency
  • Dogecoin
  • Ethereum
  • ICO
  • Litecoin
  • Market & Analysis
  • Ripple
  • Videos

Follow Us

Find Via Tags

Ada Altcoin altcoins analysis Analyst Big Bitcoin Blockchain BNB BTC Buy Cardano Coin Cointelegraph Crypto cryptocurrencies Cryptocurrency DOGE Dogecoin ETH Ethereum Exchange eyes finance Heres Inu investors latest Litecoin LTC Magazine market news NFT Prediction price rally Ripple Shiba Solana Today Token Top week XRP
  • privacy And Policy
  • About Us

© 2020 Egrow Online

No Result
View All Result
  • Home
  • Cryptocurrency
  • Bitcoin
  • Ethereum
  • Blockchain
  • Altcoins
  • ADA
  • Litecoin
  • Dogecoin
  • ICO
  • Ripple
  • Market & Analysis
  • Videos

© 2020 Egrow Online