Markets
What does it mean — TradingView News
In a recent X commentary, Daniel Yan, co-founder of Matrixport and CIO of Kryptanium Capital, offered a detailed comparison of current crypto market dynamics to those seen in early June. His insights are especially relevant as the market approaches several key economic releases that could significantly impact the trajectory of major cryptocurrencies such as Bitcoin (BTC) and Solana (SOL).
Is history repeating itself for the cryptocurrency market?
Yan’s analysis began with an overview of the current market rally, noting that both BTC and SOL are “grinding well at key technical levels now,” suggesting a potential breakout setup similar to the situation in early June. During that time, Bitcoin was challenging a major resistance level at $71,500, driven by positive personal consumption expenditure (PCE) data and weaker-than-expected ADP employment change numbers, which fueled optimism about a potentially dovish stance from the Federal Reserve.
However, Yan drew attention to the volatility that followed, as a stronger-than-expected Non-Farm Payroll (NFP) report reversed bullish sentiment, sending Bitcoin from highs of $72,000 to around $58,000 in a matter of two weeks. He highlighted this pattern to warn investors about the potential for similar market reactions in the current environment.
Looking ahead, Yan expressed a generally bullish outlook for Q3 2023, citing improving liquidity conditions and the resolution of the Mt. Gox scandal, which has been looming over the market for years. However, he remains cautious about the near-term impact of the upcoming NFP release, scheduled for this Friday. “I am becoming cautious ahead of Friday’s NFP, a similar pattern in the first half may occur,” he warned.
Yan also pointed to the release of the consumer price index (CPI) as the next key data point, with the Cleveland Fed providing modest estimates for June but less favorable projections for July. He highlighted the impact of summer energy prices on inflation metrics, noting that the rise in crude oil and gas prices since early June will likely directly impact both the headline CPI and PCE, and indirectly the core inflation numbers.
“An expectation of 0.3% core CPI on a monthly basis is already negative, imagine it getting worse,” he noted, noting the potential for these numbers to exceed expectations on the upside, further complicating the Fed’s efforts to manage inflation.
The immediate focus for Yan and many in the crypto community is Federal Reserve Chairman Jerome Powell’s speech tonight at the European Central Bank. His comments are highly anticipated for hints on how the Fed views current macroeconomic conditions and its potential policy actions in the near term. “Let’s see what he thinks about current macro situations,” Yan said, indicating the significant market-moving potential of Powell’s speech.
Bitcoin Breakout Needs Confirmation
Matrixport has released a “Chart of the Day” showing Bitcoin’s price movements from June 2 to July 1, highlighting the cryptocurrency’s recent breakout from a short-term downtrend. After signaling a bottom on June 25 on their Matrixport Greed & Fear Index, a tool often used to predict potential reversals, Bitcoin has shown signs of an oversold condition, which typically precedes a price recovery. Indeed, Bitcoin’s price began a tactical rebound over the weekend, overcoming some of the immediate technical hurdles.
NewsBTC
As the market appears to be preparing for a potential rally, Yan’s analysis and upcoming economic updates suggest that investors should brace for potential fluctuations. As these events unfold, the cryptocurrency market’s response to economic indicators and central bank announcements will be key in shaping its near-term direction.
At press time, BTC was trading at $62,802.
Fuente
