Crossroads. Markets are trading in a no-man's land heading into the weekend after BTC prices plummeted, TradFi markets surged, and uncertainty set in at full throttle. What happened in the markets this week?
Bitcoin started the week strong, gaining nearly 3% on Monday, but struggled to find its footing and continued to slide for the rest of the week.
Ether, which has underperformed BTC since March amid growing speculation that ETH ETF spot requests would be denied next month, remains just below the June 2022 3AC liquidation lows and the level critical support turned resistance at 0.05 on the ETH/BTC ratio.
Surprisingly, the ratio is green over the week despite news that proposed issuers have had “discouraging meetings” with the Securities and Exchange Commission that indicate an ETH ETF will only be approved after litigation in court, potentially signaling that the market has already largely priced in the opt-out scenario.
The crypto may be down slightly for the week, but TradFi assets rose, with the broader S&P 500 gaining 2.5% from its Monday open and tracing much of the crypto's price decline. previous week.
Unfortunately, the deterioration of the global economic situation once again appears to be a major risk that could derail the recovery. Data released this week showed disappointing economic growth in the first quarter of 2024, combined with rising inflation; Despite hopes that easing rates would boost the economy and prove a boon for risky assets, the presence of rising inflation makes such cuts untenable.
If economic growth continues to slow, it is likely that inflation will fall as demand declines, but there is no guarantee that falling interest rates will be enough to stabilize the economy, given that their arrival historically coincides with a worsening of the recession.
For those who don't understand what just happened:
First, GDP growth in the first quarter of 2024 slowed to just 1.6%, less than half of the 3.4% figure in the fourth quarter of 2023.
This figure is approximately 50% LOWER than Goldman Sach's expectations.
But it's even worse.
At the same time, the US Core PCE price… pic.twitter.com/5Rct3i9TGh
– Kobeissi Letter (@KobeissiLetter) April 25, 2024
With economic problems about to surface in America, movements in currency markets suggest the catalyst for a synchronized global slowdown will likely come from Asia.
Major Asian currencies have been under massive stress throughout 2024, and the relative value of the Japanese yen has already fallen by more than 4% against the US dollar during the month of April, on the way to post its largest decline since just before the banking crisis of March 2023. .