WHY IS THE MARKET DUMPING?
Bitcoin just dropped below $66,000 while alts are bleeding.
1. No ceasefire
- US is still attacking Iran
- Iran is still stopping ships
- Uncertainty is only increasing
And when that happens, risk assets suffer.
2. Bond market crisis
- Japan bond yields are hitting new highs
- US long-term bond yields are soaring
- MOVE Index is going higher
This is because of rising inflation expectations due to energy crisis, and markets hate this.
3. Hawkish Fed
- The market now expects no rate cut in 2026
- Rate hike odds in 2026 have surged to 48.6%
- This means market is now expecting more hawkish Fed
A hawkish Fed is bad for risk-on assets, as it drains liquidity from the market.
My thoughts
- I'm paying attention to Trump's language here
- Yesterday he said that stock market hasn't come down a lot.
- This means he isn't worried much about the stock market.
- Once his tone changes to undervalued market or BEST TIME TO BUY, a reversal could happen.