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- 🟣 CPI hot, market chop
🟣 CPI hot, market chop
Dollar strength signals high interest rates may stick around
Macauley Peterson
April 10, 2024
👋 GM.
Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:
What’s up: Inflation, the dollar
Great halving expectations
What are BTC hodlers doing?
Crypto markets reacted in sympathy with US equities to the hot CPI print this morning from the Bureau of Labor Statistics, with bitcoin initially dropping about 2% and briefly breaking $68,000 before bouncing.
The Nasdaq similarly dropped just over 2%, testing range lows from mid-March around 18,000.
The dollar markedly perked up on the news — the DXY index spiked over 1% on the day, retesting 2024 highs from mid-February and the start of April. Dollar strength, which is often (though not always) a headwind for risk assets, is contributing to the market sentiment that crypto markets broadly will continue to chop sideways for a while yet.
The question on many minds now is what impact will the halving — now estimated for the early hours of April 20 — have on markets?
Macro aside, prior cycles have not been immediately bullish for the bitcoin price; for instance, 2020 saw about two months of boring sideways price action before the post-halving bull market arrived in full force.
The main difference this time around, of course, is that bitcoin is already near previous all-time highs, thanks in no small measure to the US spot ETF inflows. These have been negative so far this week, with Monday registering an unusually large outflow of $223 million on the back of the largest bout of GBTC selling since March 25.
But if the overall trend of positive inflows continues into Q2/Q3, this post-halving period should be spicier.
DePIN is ripe to disrupt a range of traditional infrastructure networks. Our latest report, made free thanks to AIOZ Network and POKT Network unpacks how investors can best gain long-term exposure to the sector, and where the opportunity lies. Check it out here!
Long term vs. short term holders:
Source: @JA_Maartun
Some contrarian data for the bull-posters: Long-term holders are transferring BTC to short-term holders.
This pattern has previously been seen near the peaks of parabolic bitcoin moves and tends to presage a cooling-off phase in a raging bull.
One exception, however, was in 2017, when the deep red stalactites in the middle of the chart above ended up being a blip in the middle of a massive run-up lasting several months more.
Solana current design is causing users’ transactions to be displaced or dropped. Until further solutions mature, we do not see the appetite to add additional risk at present; however longer term, we think the market will eventually look past these idiosyncratic headwinds and believe SOL is still a top candidate for outperformance throughout this cycle.
Avalanche's unique subnet architecture offers applications scalability and customization, enabling a diverse ecosystem of chains from gaming to institutional finance. An array of subnet features enhance the development and user experience for blockchain-based games, with many games choosing to make Avalanche home.
The Treasury Department wants stronger crypto oversight powers, writes Blockworks’ Casey Wagner.
Op-ed: I believe that the upcoming halving will be unlike any other that came before it for one key reason: Professional investors have entered crypto.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.
