Recent Gains Amidst a Bearish Outlook
The crypto market recently experienced a 13% gain over six days, inching closer to a $1.1 trillion market cap. But let’s not start the celebration just yet—this spike didn’t break the ongoing bearish trend. In fact, it feels a bit like putting lipstick on a pig, if you catch my drift. The last significant support was tested on September 7 at $950 billion, and the past 55 days have been more about falling than rising.
Traditional Markets and Their Cryptic Connections
Coinciding with the crypto upswing, traditional markets have seen some improvement, especially the tech-centric Nasdaq Composite Index, which soared 6.2% since early September. Meanwhile, WTI oil prices had a 7.8% rally, which raises the question: Are we just witnessing a game of musical chairs where everyone hopes to grab a seat before the music stops? Sure seems like it! This high correlation between crypto and traditional assets means keeping an eye on macroeconomic conditions is more important than ever.
The FED’s Big Decisions: Good News or Bear Cries?
As stock market investors prepare for the U.S. Federal Reserve’s September 21 meeting, there’s collective anxiety. The expectation? A raise in interest rates, possibly for the third consecutive time by 0.75 percentage points. No pressure, right? With the Consumer Price Index report dropping on September 13 and critical retail sales data shortly thereafter, investors are glued to their screens like kids at an ice cream truck. But even amidst these pivotal moments, regulatory sentiment remains gloomy. The SEC’s enforcer-in-chief has made it clear: the crypto sector will remain under scrutiny. Cue the suspenseful music!
Altcoins: The Surprising Stars of the Show
Despite the dismal bearish vibes overarching the market, a few altcoins had their moment of glory last week. Bitcoin’s 12.5% pump made it the darling of crypto, boosting its dominance to 41.3%—the highest it’s been since early August. Terra (LUNA) even launched a flabbergasting 107.7% surge, thanks to a proposal for additional airdrops. If that’s not stellar, I don’t know what is! But while these numbers look impressive, professional players in the market appear skeptical about loading up on leverage longs. Is the party over before it even started?
What Lies Ahead: Are We in for a Bearish Bender?
Given the recent uptick in the market, one can’t shake the feeling that this could just be a false dawn. The 8.3% weekly performance can’t be overly reassuring when considering the broader trend seems poised to slide back down. Especially with looming macroeconomic uncertainties and a federal interest rate decision close on the horizon. Moreover, a flat funding rate in futures suggests that professional traders are keeping their cards close to their chests. If the crypto market cap tests that bearish support at around $940 billion, we could be in for a grim face-plant of about 12.5% from current levels. Who needs a rollercoaster when you have crypto?
