The markets were purely green over the last 7 days but everything has changed with a single data that we gathered from the U.S. Core Consumer Price Index (CPI) as once again it exceeded the expected data.
The FED cares about this data because it shows the power of inflation over the value of U.S. Dollar against the commodities. As the prices go up, the dollar's value follows a reverse trend. Thus, the data should never be higher than the forecast if we want the market to shine as green as possible.
According to Investing's Economic Calendar,
There is a clear down trend that has been going on since May 23 but the problem itself is not the better results that we get with Qantitative Tightening (QT) nor the current inflation rate, the major problem is the data which the investors did not expect and the sticky side of inflation in the global economies.
The old saying urges on the fact that it is way harder to lower the inflation rate from 4% to 2% than cutting it from 100% to 50% in a couple of years. Unfortunately, there is no surprise this time in the history of humanbeings.
What's Next, Then?
I expect to hear pretty hawkish words from Powel in the next FOMC Meeting. However, the next meetings will be held in March and there is still enough time markets to recover.
Thinking loudly, I am projecting a market that will go sideways for a week to " digest " the bad news. As of the next week, there might be one more upward urge in the global markets. Through the second week of March, we may definitely see a bloodbath in both crypto and other markets as the speech by the Chair of FED has a potential to destroy the markets 😅
Crypto's Own Condition
Crypto is in line with the global markets in terms of its reactions to negative and positive news.
As NASDAQ and S&P500 are likely to suffer for some time, we may need to have some rest and stay away from the screens meanwhile. However, I cannot believe that the positive sentiment has totally disappeared.
The support around $48.6K should not be broken. In such a case, we may see the market swinging within a lower vertical channel. Yet, I am on the positive side and my expectation is to see one more higher high before a " healthy correction.
What do you expect to see in crypto and global markets?
Share your thoughts below 👇
Hive On ✌️