What is happening on Crypto Market now?
A mixed week for both crypto and equities. Bitcoin ended the week up by almost 2%, closing at 19.044 on Sunday. ETH finished the week bit lower by roughly 1.4%. US Equities dropped in the range from 1 to 3%, with NASDAQ closing at 10.575 and S&P closing at 3.584 last Friday. Both markets continue to underperform because of the outcome of the last FED’s monetary meeting, held on Wednesday 21st September 2022. Moreover, last Friday, Europe inflation hit record 10% as energy prices continue to soar. Russia’s squeezing of gas supplies to Europe sent energy prices surging and forced governments in the EU to intervene by spending billions of euros to shield consumers and businesses from the fallout. The hot inflation reading reaffirms ECB to step up rate increases on its next monetary meeting later in October.
Staying in Europe, the UK went through a turbulent week. The new UK government announced tax cuts just weeks into its tenure. As a result, the British Sterling dropped to an all-time-low, mortgage deals were pulled from the market as UK government bonds sold off heavily, with their yields touching historic new levels, and causing the Bank of England to begin a temporary purchase program to calm down volatility. The UK government just clearly demonstrated how the path for central banks towards higher interest rates and less support for bond markets may become much more complex than initially thought.
Last month, the FED raised interest rates by 0.75% and announced more tightening ahead. As a result, the target range for the federal funds rate stands now at 3.00–3.25%. The median projection among FED’s board members for a target range midpoint was at 4.4% at the end of 2022 and 4.6% at the end of 2023. The September inflation reading will be published on 13th October 2022 — the FED of Cleveland’s Inflation Nowcasting forecasts the CPI fell to 8.20%, down from 8.3% a month earlier, with Core CPI increasing further to 6.64% p.a. However, the strength of these trends for the US CPI remains to be seen.
Source: Yahoo Finance
US Fund Rates
Source: Refinitiv | Reuters, Sep. 14, 2022 | by Vincent Flasseur
Overall, the crypto market sentiment (measured by Crypto Fear & Greed Index) went up slightly to 24/100, still indicating Extreme Fear, compared to a week ago when the Index stood at 21/100. The total crypto market cap went up by more than 1%, however, remaining below the psychological $1 trillion mark. ETH and BTC dominance both dropped by 1%, compared to the previous week.
WHAT TO WATCH FOR: The next monetary policy meeting for the ECB: October 27th, 2022; FED: November 01–02nd, 2022; The next US CPI release for September 2022 is scheduled for October 13th, 2022. The next US GDP update will be released on October 27th. 2022.