Hey, so here’s what’s going on with the crypto market today.
Morning Moves (8-10 AM UTC+6):
The market’s kinda chill, nothing too crazy. Just your usual morning routine.
Late Morning to Afternoon (11 AM – 3 PM):
Japan’s Producer Price Index (PPI) dropped, which means inflation is eating into people’s spending power. Meanwhile, China’s central bank (PBOC) has only withdrawn 0.5 billion in the last three days, which is pretty small. So, things are tightening up a bit.
Late Afternoon (4-6 PM):
The market’s looking red, probably because South Korean traders are shorting (betting against) the market. Classic move.
Evening (7-10 PM):
Things turn green! Why? Because inflation is dropping, and the U.S. Federal Reserve (Fed) doesn’t need to be super aggressive with rate hikes. Investors are focusing on core inflation, which is a big deal.
Late Night (10 PM – 12 AM):
Back to red. Market makers (MM) are doing their thing, probably manipulating prices a bit.
Early Morning (1-8 AM):
Green again! The Reverse Repo Program (RRP) has been stuck for three days, only increasing by 1 million. This could mean a big move is coming soon.
Bitcoin and Liquidity: Bitcoin’s going up even though job openings (Jolts) are rising. Normally, more jobs mean a stronger dollar (DXY), but not this time. Why? Because the data might be sketchy. In the past, some companies were counted twice in surveys, so Jolts isn’t always reliable.
Trump and Tariffs: There’s a rumor that Trump might soften tariffs, but the 25% tariffs are still in place. Bitcoin jumped when news came out that Trump might reconsider steel tariffs for Canada. This could mean Trump’s strategy is shifting—he’s looking for new sources of liquidity (cash flow), like from Saudi Arabia and China.
China’s Play: Chinese stocks listed on Nasdaq are up 4%, with companies like Alibaba and XPeng seeing big gains. China’s stimulus money is slowly flowing into its own companies, which could lure U.S. investors into a FOMO (fear of missing out) situation. This could dry up U.S. liquidity even more, forcing Trump and the Fed to soften their stance.
Inflation and the Fed:
If inflation goes up, the dollar (DXY) usually rises because the Fed might tighten monetary policy. But interest rates are already at 4.2%, which is hurting jobs and the economy. So, even if inflation rises, the Fed can’t afford to be too aggressive. That’s why Bitcoin might still go up—because the Fed can’t hike rates much more.
If inflation drops, the Fed might loosen monetary policy, increasing the money supply. But with the S&P 500 already down 10%, if the Fed doesn’t act, the U.S. could slide into a recession.
The Fed’s options are limited: they can either pause rate hikes or cut them. If they pause, Bitcoin’s bottom might be near. If they cut rates, inflation could rise, but the Fed can only cut rates 2-3% this year. It’s a tough spot.
Japan’s Situation:
Japan’s PPI (Producer Price Index) dropped to 4%, which means factories aren’t raising prices despite inflation. This could lead to deflation if demand stays low.
Japan’s 30-year bond yield hit its highest since 2006, which is a sign people are preparing for inflation. Japan’s economy is tied to the U.S., so any positive data from Japan affects U.S. markets. Japan holds a lot of U.S. debt, so money flows from Japan to the U.S.
The market’s a rollercoaster today, with inflation, Fed decisions, and global liquidity playing big roles. Bitcoin’s moving up despite some shaky economic data, and China’s quietly pulling liquidity from the U.S. Japan’s economy is also a wildcard, with inflation and bond yields causing ripples. The Fed’s in a tough spot—they can’t hike rates much more without hurting the economy, so Bitcoin might keep rising. It’s a messy, interconnected world out there!
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