WHY IS THE MARKET DROPPING SO MUCH?


Bitcoin just dropped below $66,000 while altcoins are also falling sharply.
1. No ceasefire
- The US is still attacking Iran
- Iran is still blocking ships
- Increasing instability
And when that happens, risk assets will be affected.
2. Bond market crisis
- Japanese bond yields are reaching record highs
- US long-term bond yields are soaring
- The MOVE index is rising sharply
This is due to rising inflation expectations caused by the energy crisis, and the market does not like this.
3. Tight monetary policy by the Fed
- The market currently predicts no rate cuts in 2026
- The probability of rate hikes in 2026 has surged to 48.6%
- This means the market is now expecting the Fed to adopt a more hawkish monetary policy
A hawkish monetary policy from the Fed will be unfavorable for risk assets, as it reduces market liquidity.
My thoughts
- I am paying attention to Trump’s words here
- Yesterday, he said the stock market hasn’t fallen much
- This means he’s not very worried about the stock market
- Once his tone shifts to the market being undervalued or the BEST TIME TO BUY, a reversal could occur.
BTC1,27%
MOVE-0,33%
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