MacroRisk Advisors (MRA) CEO Dean Curnutt recently said in a market analysis that surging energy costs alongside stronger inflation data have driven the U.S. 10-year Treasury yield to break above the 5% level for the first time since 2023. Market bets that the Federal Reserve will restart a rate-hike cycle are heating up rapidly. He warned that if the Fed takes further rate-hiking action, the S&P 500 could face pullback pressure of 8% to 10%, potentially repeating the downside correction pattern seen at the end of 2018.
From a macro-technical and liquidity perspective, the 10-year Treasury yield’s breakthrough above the psychologically and technically critical resistance level of 5% has indeed triggered concerns that traditional equity assets may see profit margins squeezed. However, compared with 2018, the current market has already priced in the tightening of liquidity relatively fully. Such extreme hawkish expectations often lead to short-covering around key technical support zones, providing an opportunity to form a solid bottom divergence for risk assets.
In traditional financial markets, high yields in the short term offer some support to the U.S. dollar index, while overvalued segments of the U.S. stock market face valuation re-pricing. But judging from price action on the chart, asset prices often complete risk repricing and bottoming in advance under the most pessimistic expectations for rate hikes. Once inflation data shows marginal easing or hawkish sentiment has been fully unwound, the surge-and-retrace in yields is likely to quickly release suppressed upside momentum.
For the crypto market, $BTC —after undergoing a sufficiently thorough shakeout in the early phase alongside mainstream risk assets—shows, in terms of on-chain coin/holder structure and technical patterns, very strong resilience. When traditional equities potentially pull back due to fear of rate hikes, the crypto assets’ role as an inflation hedge and an independent liquidity sink is becoming increasingly apparent. Meanwhile, a short-term technical retest of key moving averages can actually provide an excellent liquidity accumulation range for subsequent upside breakouts.
#Fed #MacroEconomy #CryptoTrading
From a macro-technical and liquidity perspective, the 10-year Treasury yield’s breakthrough above the psychologically and technically critical resistance level of 5% has indeed triggered concerns that traditional equity assets may see profit margins squeezed. However, compared with 2018, the current market has already priced in the tightening of liquidity relatively fully. Such extreme hawkish expectations often lead to short-covering around key technical support zones, providing an opportunity to form a solid bottom divergence for risk assets.
In traditional financial markets, high yields in the short term offer some support to the U.S. dollar index, while overvalued segments of the U.S. stock market face valuation re-pricing. But judging from price action on the chart, asset prices often complete risk repricing and bottoming in advance under the most pessimistic expectations for rate hikes. Once inflation data shows marginal easing or hawkish sentiment has been fully unwound, the surge-and-retrace in yields is likely to quickly release suppressed upside momentum.
For the crypto market, $BTC —after undergoing a sufficiently thorough shakeout in the early phase alongside mainstream risk assets—shows, in terms of on-chain coin/holder structure and technical patterns, very strong resilience. When traditional equities potentially pull back due to fear of rate hikes, the crypto assets’ role as an inflation hedge and an independent liquidity sink is becoming increasingly apparent. Meanwhile, a short-term technical retest of key moving averages can actually provide an excellent liquidity accumulation range for subsequent upside breakouts.
#Fed #MacroEconomy #CryptoTrading