Stocks and crypto remain in a difficult macro environment
Tensions over Ukraine and the Fed had already created a backdrop for poor market performance in crypto, and that trend is still strong today.
As the possibility of an increase in interest rates from the United States grew, James Bullard, president and CEO of the St. Louis Fed was the focus of attention. A statement was due within less than an hour of this writing.
Bullard made clear statements to the mainstream media on February 16th, indicating that he supports raising rates faster and harder to combat inflation.
He stated that “We are missing the inflation target on our preferred measurement… and policy remains at rock bottom lows, and we still have asset purchases going on,” CNN quoted him from Reuters.
“This is the moment when we must shift to less accommodation.”
A rapid increase in anti-inflation efforts would put pressure on booming stocks, despite numerous rate increases that have been notionally priced into. Bitcoin, which is already strongly correlated to equities would feel the pain in tandem.
Geopolitics is now in focus. Reports of violence in Ukraine-Russia standoff have added to the bitter mood. These reports come after conflicting claims of Russian de-escalation and an “imminent invasion” by the U.S government.
Within the first hour of trading, the S&P 500 fell 1.2%.
Retest odds increase by $40,000 for lost bids
Bitcoin traders were sceptical about the immediate outlook, which was evident in bids closing at $40,000 and current spot levels.
Material Indicators data showed that there was very little demand for that area on major exchange Binance. However, at $40,000, similar “thin” air allowed for a possible dip to $35,000 should an unexpected move occur.
“Does not mean that local support isn’t available or that the fractal was invalidated yet but it does raise downside risk of looking from this range,” Material Indicators commented on the chart that showed the Binance order books.