March 17, 2023, 12:32PM EDT
• 9 min read

Effect of Macro Policies on Crypto Markets

Quick Take

  • 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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