Given the current economic conditions, analysts are making bold predictions about the possibility of the U.S. economy falling into a recession by next year. Rising gas prices, a hawkish Federal Reserve, and a generally slowing economy are significant risks facing the nation's economy today. In this article, we will see the inflation projections for June and discuss what this means for both traditional and cryptocurrency markets. We will also explore the recent market volatility and its impact on cryptocurrency investments. Additionally, we will examine the restructuring process of a major crypto lender and its implications for the industry as a whole.
Inflation Projections for June:
The June U.S. consumer price index (CPI) readout is scheduled to be released on July 13th at 8:30 a.m. Eastern Time. The inflation is expected to be even higher year over year, with the previous inflation number at 8.6% and the median forecast for June projected to be around 0.8%. This puts the inflation rate closer to the 9% mark, which could have significant implications for the markets.
Impact on Crypto and Traditional Markets:
The higher the inflation rate and the greater the divergence from expectations, the more risk assets tend to react in anticipation of policy makers' response. If the inflation rate comes out to be even higher, say above 9%, a dramatic sell-off could occur in both cryptocurrency and traditional assets. Bitcoin, for example, could see a significant drop from its current price of above $20,000 to below $19,000 or even the mid $18,000 range. However, it is unlikely that the Federal Reserve will raise interest rates by more than 75 basis points, even if the inflation rate exceeds 9%.
Market Volatility and Cryptocurrency Investments:
The recent market volatility has had a significant impact on cryptocurrency investments. The global crypto market cap has decreased in value, currently sitting at $915 billion. The crypto fear and greed index, which measures market sentiment, has also shown increased fear in the past few weeks, with a current reading of 22 out of 100. Bitcoin and Ethereum, the two bigge cryptocurrencies by market cap, have also experienced price drops, with Bitcoin currently sitting at $20,541 and Ethereum at $1,100. Other altcoins have struggled to find positive growth in this volatile market.
Technical Analysis of Bitcoin:
A closer look at the four-hour chart for Bitcoin reveals that it dropped about 7% over the weekend after failing to break through the 200 exponential moving average resistance level. The relative strength index (RSI), that measures the momentum of price movements, has dropped from being overbought on Friday with a reading of 75 to 38 as of this morning, nearing oversold territory. The weekly chart for Bitcoin also shows that it has rallied 15% but is still facing resistance at the 200 moving average for about three weeks.
Impact on DeFi (Decentralized Finance):
The recent market dip and liquidations have also affected the decentralized finance (DeFi) sector. Many DeFi protocols have seen a decline in the amount of money locked in their platforms since the all-time highs reached in December. However, in recent days, there has been a slight recovery, indicating a consolidation phase rather than a bullish boom in the market.
Restructuring Process of Celsius:
One of the major cryptocurrency lenders, Celsius, has recently undergone a restructuring process. Less than a month after allowing positive withdrawals for customers, the company has put a new law firm in charge of its restructuring process. This move has raised concerns among investors and has implications for the overall cryptocurrency industry.
Conclusion:
In conclusion, navigating the current economic conditions, including inflation projections, market volatility, and the future of cryptocurrency, requires careful analysis and consideration of various factors. The upcoming June inflation projections are anticipated to be higher, which could potentially impact both traditional and cryptocurrency markets. The recent market volatility has resulted in a decline in cryptocurrency investments, with Bitcoin and Ethereum experiencing price drops. Technical analysis of Bitcoin suggests potential resistance levels and market sentiment.
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