Yesterday, the US reported CPI data, basically an index calculating the price increase or decrease of a basket of goods. The number is higher than expected but one could argue this is simply due to the lower prices during the weakened economy during covid, or maybe temporary supply shortages. Markets seem to have mostly shrugged it off.
The S&P reached new record highs, the Nasdaq marched closer to its all-time high while the Dow stayed flat. The 10-year yield slumped down, now back at 1.43%.
This is ultimately positive for real assets, gold rose on the news. Bitcoin should also benefit long-term but, on the session, you wouldn’t tell.
BTC is just down 1% and after a massive up day but so the reaction was tame. While this might reverse, right now, the chart shows lower highs and lower lows, the definition of a downtrend. This means we might need to retest the lower 30K’s -even maybe the upper 20K’s- before any uptrend.
On the session, alts definitely underperformed. One can see the BTC Dominance jumping back to 44.
The thing I find shocking and maybe hyper bullish for traders is that there’s so much positive news coming through and prices aren’t reacting much.
In the past fews days: El Salvador made BTC legal tender and there’s rumours that Tonga and other countries like Paraguay for example might follow on. We saw several companies within the crypto space raise significant capital to expand. MicroStrategy raised the amount of note offering because the demand was overwhelmingly positive and higher than expected. Traditional funds and trading platforms are gaining exposure and looking to offer crypto. We’re picking up on more companies applying for crypto-linked products like ETFs, ETPs and ETNs. State Street is setting up their crypto unit for custody and trading. Just yesterday, Texas greenlit state-chartered banks to custody crypto.
At some point, this will kick in and, in my opinion, trigger some significant move up.
Maybe the one cloud was Binance getting cut off by Silvergate, their USD banking partner, which naturally hints at a certain fear from the bank with regards to Binance activity in and out of the US and potential investigation from regulators.
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