The crypto market has a strong correlation with NASDAQ and, specifically, NVIDIA. These days all crypto and the U.S. related markets are having hard times due to the growing tension in the global trade that the U.S. is involved and the statements by the president that is perceived as a rise in the global tension.
As a consequence of the tariff wars, the expectation of a recession and the political risks the investors see, the sell-off has been occurring in the markets. Though the majority of the investors are even below the break - even levels, they believe that the year will end with new all time high levels for both the U.S. markets and the crypto.
As we experience red days in the charts, the fundamentals get better for our ecosystem. The Security Exchange Commission has been canceling or finalizing the lawsuits against crypto service providers to open their path to growth in the U.S as Donald Trump prefers. This extremely bullish case has been neglected by the investors as their focus is directed to some artifical or short - term concerns in the markets.
One of the most critical role the crypto ecosystem is given is to control the risk appetite in the world. The president, Donald Trump, does not want to pay high interest rates for the government bonds and the economy may need to slow down to encourage the FED to keep cutting the interest rates.
The ongoing market turbulence is directly related to a signal / push to the FED so that they open the way for interest rate cuts and motivate the investors or companies to continue investing in the U.S.-based firms. The DOGE operations have yielded desirable results for their purposes. The control over the expenditures clearly showed that the debt by the U.S. is not sustainable in the current state but the DOGE will handle it as they have been doing so far.
The DXY index is going down and this can boost the economic activity as it enables an opportunity for businesses to grow their trading volume. As Trump wished, there will not be a "very" strong USD which can be problematic for the producers in the country.
All the steps are in line with the goals of Donald Trump. The markets are losing some value as they were overpriced. The inflation data is expected to be realized below the expectations and the FED may foredate the interest rate cut plans. The cases get better if everything come about according to the plans.
More initial jobless claims, lower prices in the markets and inflation data coming lower than expectations = Interest Rate Cuts 😉
What do you think about the possibility of earlier interest rate cuts?
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