The latest report from the Matrixport Research Institute highlights key market information:
– CPI has been below market expectations for two consecutive months, benefiting the venture capital market.
– The Federal Reserve does not rule out providing stimulus measures at the end of the year, which is positive for the price of BTC.
– The hawkish stance of the Federal Reserve is noteworthy, with a possibility of a slight shift towards a dovish stance by the end of the year.
– This week is a macroeconomic big week, with US CPI, PPI, and economic data released by the Federal Reserve meeting all relatively favorable for the venture capital market. However, the response in the crypto market has been lackluster, contrasting with the US stock market. The lower inflation data and the slightly hawkish stance of the Federal Reserve may send confusing signals to BTC.
The CPI data has been below the previous month for two consecutive months, which is bullish for the price of BTC. On June 12, the US Consumer Price Index (CPI) data was released. The year-on-year increase in CPI for May was 3.3%, slightly lower than the previous and expected values of 3.4%. The month-on-month increase in CPI for May was 0%, below the expected 0.1% and significantly slower than the previous value, marking the lowest level since July 2022. The CPI has been lower than the previous month for two consecutive months. Since financial markets mainly focus on marginal changes, this inflation data is clearly positive for Bitcoin, potentially providing enough tailwind for a price increase.
The hawkish stance of the Federal Reserve is noteworthy, with a possibility of a slight shift towards a dovish stance by the end of the year. Federal Reserve officials have taken a slightly hawkish stance, adjusting their rate forecasts. The FOMC (Federal Open Market Committee) expects two rate cuts in 2024, rather than the market’s general expectation of one. This reactive behavior is predictable, and it is not ruled out that the Federal Reserve may slightly shift towards a dovish stance by the end of the year to provide more support for further rise in risk assets.
It is not ruled out that the Federal Reserve may provide more stimulus measures at the end of the year, which is positive for the price of BTC. The Federal Reserve continues to advocate for a long-term high-interest-rate policy, and the 10-year Treasury yield has broken its long-term upward trend, indicating that the market is pricing in a looser monetary policy by the Federal Reserve.
Seasonally, based on historical analysis, June and July are expected to continue to provide upward support for Bitcoin. August and September are traditionally more challenging, but before the strongest fourth quarter of the year arrives, the market usually experiences positive performance. These buying trends help support the rise in Bitcoin prices, but lower inflation may change the Federal Reserve’s response mechanism. Therefore, it is not ruled out that the Federal Reserve will provide more stimulus measures at the end of the year, potentially leading to a historical high for Bitcoin.
President Biden’s nomination of CFTC Commissioner Romero to lead the FDIC, and the continued expansion of the impact of the US election on crypto assets. President Biden nominated CFTC Commissioner Christy Goldsmith Romero to lead the Federal Deposit Insurance Corporation (FDIC) and nominated CFTC Commissioner Kristin Johnson to serve as Assistant Secretary of the Treasury for Financial Institutions. The two Democratic CFTC commissioners have been urging the agency to issue rules or guidelines to protect consumers and address conflicts of interest in the cryptocurrency field. Commissioner Romero has been nominated as the chair of the FDIC, warning of “contagion risks” in the crypto market and comparing it to the 2008 financial crisis.
The above viewpoints are from Matrix on Target. Contact us to get the complete report from Matrix on Target.
Disclaimer: The market carries risks, and investments should be made cautiously. This article does not constitute investment advice. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after careful consideration of individual circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.