Macromania. Crypto assets are becoming volatile as macro once again dominates the narrative. Has the bottom been reached or is the decline just beginning?
Bitcoin L1Bitcoin is an innovative payment network and a new type of currency. View profile” class=”stubHighlight”>Bitcoin this morning fell below the key $60,000 level that had supported the price over the past two months, falling as low as $56.6k ahead of the rate decision. interest from the Federal Open Market Commission (FOMC).
Although they acknowledge that BTC could see further downsides in the near future, some traders have I became optimistic on the possibility that much of the selling has declined, believing that alts have been at the forefront of dumping and that their relative strength today will mark a low against BTC.
Short-term price projections are still murky, but crypto bulls remain confident about the future trajectory of asset valuations, according to Ark Invest CEO. Cathie Bois GuestCEO of ARK Investment ManagementView profile” class=”stubHighlight”>Cathie Wood increasing her price target to $2.3 million BTC and noting that the coin could trade as high as $3.8 million if it attracts increased institutional interest.
❖ CATHIE WOOD INCREASES HER BITCOIN FORECAST BY $2.3 MILLION
According to Wood, Bitcoin could reach $3.8 million if institutional investors start investing heavily in it. Although the analysis is probably correct, it is unlikely that institutions will invest 5% of their… pic.twitter.com/Kc6bBBHNMP
– *Walter Bloomberg (@DeItaone) May 1, 2024
BTC has become the best performing asset of the last decade; nevertheless, it did not exist during a true recession period. With signs of a global economic turnaround, the crypto industry may soon face its most significant test yet…
Private sector employment figures released last week indicate that the U.S. economy lost 192,000 jobs during the third quarter of 2023. This figure represents a substantial gap of 686,000 from monthly employment data non-agricultural in the United States, raising concerns about the reliability of market data. Participants tend to reinforce their belief in a strong labor market.
The Job Openings and Labor Turnover Survey (JOLTS) showed that job openings in March fell to their lowest level since February 2021, with the construction sector showing the biggest drop in job offers ever recorded!
Simultaneously, the ratio of job openings per unemployed person, as well as quit rates, fell to near pre-COVID-19 levels while the number of hirings plunged to its lowest level since January 2018, suggesting that while there is demand to find and keep a job, employers have little demand for labor. Similar data patterns preceded a decline in employment.
Hires and departures are in free fall as the job market gradually freezes; traditionally precedes sharp reductions in payroll pic.twitter.com/9yMXWO0TAJ
– zero cover (@zerohedge) May 1, 2024
On commodity markets, oil prices fell nearly 3% this morning after inventory levels exceeded analysts' expectations, signaling potential uncertainty over future economic growth and corresponding demand for this key commodity.
Additionally, worrying data on the U.S. manufacturing sector adds to economic concerns, revealing rising input costs alongside a decline in new orders, a deadly combination of data that points to stagflation and complicates the business outlook for producers .
While the FOMC decided to maintain its rate target at 5.5%, the Committee included a bullish surprise for markets that allowed risky assets to rebound from the initial announcement, decreasing the amount of Treasury securities it will remove from the balance sheet each month from $60 billion to $25 billion starting in June, providing a favorable yield offering given the increased need to repurchase expiring securities.
The Federal Reserve maintains it will keep rates high until there are clear signs of progress toward its long-term inflation goal of 2%, but the economy is starting to show signs of weakness.
Once the cuts begin, if deteriorating demand continues to weigh on prices, it is unclear whether they will be able to bring about an exit from recession, given that their arrival has historically coincided with a deterioration in economic conditions .