Markets
What does this mean — TradingView News
In a recent commentary on X, Daniel Yan, co-founder of Matrixport and CIO of Kryptanium Capital, offered a detailed comparison between the current crypto market dynamics and those observed in early June. His insights are especially relevant as the market approaches several important economic releases that could significantly influence the trajectory of major cryptocurrencies like Bitcoin (BTC) and Solana (SOL).
Is history repeating itself in the cryptocurrency market?
Yan’s analysis began with an overview of the current market recovery, noting that both BTC and SOL are “grinding at important technical levels right now,” suggesting a potential setup for a breakout similar to the situation in early June. During that period, Bitcoin was challenging a key resistance level at $71,500, influenced by positive Personal Consumption Expenditures (PCE) data and weaker-than-expected ADP employment change numbers, which fueled optimism about a potentially dovish stance from the Federal Reserve.
However, Yan drew attention to the volatility that followed, when a stronger-than-expected Non-Farm Payroll (NFP) report reversed the bullish sentiment, causing Bitcoin to plummet from highs of $72,000 to around $58,000 in two weeks. He highlighted this pattern to warn investors about the potential for similar market reactions in the current context.
Looking ahead, Yan expressed a generally optimistic outlook for Q3 2023, citing improving liquidity conditions and the resolution of the Mt. Gox case that has been looming over the market for years. However, he remains cautious about the short-term impacts of the upcoming NFP release, scheduled for this Friday. “I am remaining cautious about the NFP on Friday — a similar first half pattern could happen,” he warned.
Yan also pointed to the CPI release as the next crucial data point, with the Cleveland Fed providing modest estimates for June but less favorable projections for July. He emphasized the impact of summer energy prices on inflation metrics, noting that rising crude oil and gas prices since early June will likely influence both the core CPI and PCE directly, and the core inflation numbers indirectly.
“A core CPI expectation of 0.3% MoM is bad enough, imagine if it gets worse,” he said, noting the potential for these numbers to exceed expectations to the upside, further complicating the Fed’s inflation management efforts.
The immediate focus for Yan and many in the crypto community is Federal Reserve Chairman Jerome Powell’s speech tonight at the European Central Bank. His comments are highly anticipated for hints on how the Fed views current macroeconomic conditions and its potential policy actions in the near term. “Let’s see what he thinks about the current macroeconomic situations,” Yan said, indicating the significant market-moving potential of Powell’s speech.
Bitcoin Breakout Needs Confirmation
Matrixport has released a “Chart of the Day” charting Bitcoin’s price movements from June 2 to July 1, highlighting the cryptocurrency’s recent breakout from a short-term downtrend. After signaling a bottom on June 25 on its Matrixport Greed & Fear Index — a tool often used to predict potential reversals — Bitcoin showed signs of an oversold condition, which typically precedes a price recovery. Indeed, Bitcoin’s price began to tactically recover over the weekend, overcoming some of the immediate technical hurdles.
BTC News
While the market appears to be gearing up for a potential rally, Yan’s analysis and upcoming economic updates suggest that investors should brace for potential fluctuations. As these events unfold, the crypto market’s response to economic indicators and central bank communications will be key in shaping its near-term direction.
At the time of writing, BTC was trading at $62,802.
Source
