Markets Correct

The news from Planet Ruby—Friday, April 19, 2024

• Signal: Volatility
• Noise: Peter Schiff

All markets breathe and nothing is up-only. Now that last week's CPI data has been digested, we're seeing that more clearly.

Not so long ago, traders were expecting six interest rate cuts this year. Now, following Jerome Powell's comments that inflation is likely to delay cuts further, the number is down to one. There is even increasing talk of a rise in some quarters.

Following Iran's attack on Israel, markets are viewing the world as a more dangerous place, prompting a flight to safety. The dollar has been the chief beneficiary of this. The DXY has continued to strengthen and is now above 106, giving a headwind to risk assets. Gold corrected along with other assets, but is now trading close to its all-time high once again.

Following this morning's counter-attack by Israel on Iran, markets fluctuated but rapidly stabilized. The DXY may have printed a lower high, indicating the top may be in. Gold briefly spiked higher but then dropped back, potentially also printing a lower high.

In other news, UK inflation fell to 3.2%: A significant drop, but still above the expectations of 3.1%.

Crypto Remains Risk-On

Bitcoin is trading towards the bottom of the range it has established since its high on March 14, just below $74,000. For now, $60,000 is holding as support, though another retest of $62k would likely threaten that.

A period of consolidation or a short downtrend around the Halving is normal, and the exceptional run-up in the first part of 2024 demands a cooldown. A number of analysts have expressed optimism that a few more weeks of sideways and lower prices might just reset the market enough to provide the foundations for a sustainable rally into the end of the year and possibly beyond. Previously, the market's exuberance had pointed towards an early cycle peak.

There are some early signs of bullish divergence on the 4h chart, which may be indicating a short-term reversal. Whether or not that follows through to a wider recovery remains to be seen. $56k and $52k are obvious downside targets if $60k breaks. Like the TradFi markets, Israel's strike on Iran brought additional volatility, but bitcoin has been bid heavily from its new low at $59,600 and is currently trading back over $64k.

There has been some good news from Hong Kong, which has approved bitcoin spot ETFs, though they're not likely to be as big a deal as Bitcoin Twitter suggests.

ETH ETFs were also approved, in a move that separates Hong Kong from the US. However, the technical picture isn't looking great for ETH, which has recently broken support and could be looking at some quite significant downside action.

What's New In The SKALEVERSE?

SKALE continues to carve out a reputation as the go-to chain for gaming and AI applications. Thanks to its gas-free model, it now challenges both BNB Chain and Solana.

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