The Fed meeting that kept investors uncertain brought a bit more clarity, yesterday. Unfortunately for holders of risk, the message is hawkish, signalling interest rates might be raised at a faster pace than expected.
The 10-year yield jumped from below 1.5% to now just below 1.6%. The dollar index rose almost a full percent. Conversely, equities moved down along with gold -the latter losing more than 2% on the session.
Crypto is akin to other real assets and so would benefit from rates staying low. On the news and along with the main market, BTC fell about 4.5%, from above $40,000 to now $38,000.
The BTC dominance seems to be steadying at 45 or 46. There is a possibility of retracement, meaning that alts would outperform for a bit. I’m wary of the BTC dominance rising because I suspect that if it rises long-term it suggests a rather bearish moment for the crypto space, where prices go down but alts -more volatile- just keep on underperforming, while people go back to the safety of BTC.
Alts right now are underperforming, interestingly, many of yesterday’s outperformers now are retracing, I’m looking at MATIC, TERRA, AAVE or DOT, down between 5% and 10%.
Looking at data and charts, the picture is a bit unclear right now.
It’s great to see the open interest on BTC futures grow by more than 20% since the May bottom, along with the leverage on various exchanges increasing; this suggests people are more comfortable with taking risk.
We also heard reports of Panama proposing a crypto-related bill in July. Along with the move by El Salvador, it shows a genuine interest in the solution by, well, countries !
Speaking of El Salvador and on a less supportive note, the World Bank issued a statement saying they would not be assisting the country with the bitcoin implementation. Ok then.
There’s also been some crackdowns in Korea and China, with their local crypto exchanges. In Korea, some exchanges just halted operations due to regulatory concerns. In China, we hear of Huobi lowering the leverage allowed on derivatives products, now limited to just 5X. Ultimately, and while it might not feel like it, this might be supportive long-term.
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