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This piece explores the historical effect of macroeconomic changes on crypto markets, using bitcoin’s price as the industry indicator.
Bearish price action for bitcoin can be observed post-March 2022, which is a combination of contractionary macroeconomic policies and the unfolding of unfavorable crypto-native events.
A change in market sentiment can be noticed in January 2023 from decreasing Reverse Repo balances, i.e., increasing market liquidity and increasing bitcoin prices.
No clear guidelines from the Fed regarding the Quantitative Tightening pivot, the yield curve’s indication of bearish long-term sentiment, and the outside chance of inflation growth courtesy of rising hourly earnings make the mid-to-long-term market sentiment uncertain
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