Inflation as an Indicator for the Cryptocurrency Market
It is often said: 🔺 Inflation is rising — bad for the markets. 🔻 Inflation is falling — good. However, upon careful examination of the actual data from recent months, one can notice an astonishing pattern: inflation and the crypto market move synchronously. And this correlation is much deeper than just a reaction to Fed rates or the money supply.
Yes, technically everything looks very positive, especially considering how altcoins have behaved — for many assets, the seller is simply no longer there. All the pressure mainly came from correlators. Why do I think so? It’s simple. When the S&P 500 drops by 15%, and at the same time Ondo, AVAX, Internet Protocol, HBAR decline by the same 10-15%, while some, like fartcoin, Layer or Tron, even grow — this is an anomaly.
If the topic of tariffs really fades into the background in the media, it could become a serious trigger for a market reversal. Both from a technical and fundamental point of view. Technically (chart) — this is how reversals often form: first, there is liquidity accumulation at the lows in a narrowing range, or a sharp V-shaped bounce.
🇺🇸 WHY IS TRUMP AIMING TO CRASH THE STOCK MARKET BY 20%?
1/ When stocks fall, investors massively move to more reliable assets, for example, US Treasury bonds. 2/ This pressure forces the Fed to lower interest rates to support the economy. 3/ Lowering rates allows Trump to refinance the US national debt at a lower interest rate. Everything becomes cheaper.
While everything is falling — I am buying. Crypto, stocks — yes, everything is going down. But it is precisely in such moments that future profit is formed.
I picked up some $DOGE and a few altcoins that I have been tracking for a long time. I also strengthened my positions in stocks — mainly Tesla and the S&P 500 index.
No one knows where the bottom is, but one thing I know for sure — you need to be in the market, not out of it. Panic is not a strategy. But discipline and cold calculation work in the long run.
It's curious how long such a desynchronization will last. I can't say it makes me very happy — this has happened before. In the end, after a few days, BTC started moving again in line with the stock indices. I especially want to draw attention to Monday. If you look into the archives, almost all 'Black Swans' and final market crashes occurred on this day.
Most people do not understand the game Trump is playing, but I will explain it simply. In 2018, his tariff chaos turned liquidity upside down — and now it seems history is repeating itself. December 2018. Trump calls himself a 'tariff man'. Sounds familiar? The market is panicking, the S&P 500 is down 15%. Everyone is in shock, capitulation at the highs.