Daily Bitcoin and Crypto Analysis

Daily Macro And Crypto Markets Update: Inflation Jumps Massively and Pushes Risk Markets Down. Here's How To Play It.

November 11, 2021

Justin d'Anethan

Yesterday I mentioned that some investors in traditional markets took profit off the table due to inflation data about to come out. It came out, and it turns out it’s the highest in about three decades.

The key metric jumped to 6.1%, which is very high, no matter how you look at it. 

Essentially it’s a function of cash being worthless and/or prices rising and/or production and supply chains being constrained by countries shutting down in the past year or two. 

That type of shift definitely weighs on risk assets. And, indeed, you can see equity indexes go down. I’m always talking about the Dow, S&P, and Nasdaq, but you’ll see the impact across the globe during Asian and European trading hours. 

Now, let’s look at crypto. In the long term, I think inflation supports Bitcoin, programmatically scarce and decentralized, but investors don’t think that way in the short term. When traders turn risk-off, when markets go down and when people have maybe to fund leveraged positions in the futures and options market, they tend to sell what’s available and liquid -and that’s crypto, among other things.

Right now, the broad crypto market has dropped about 4-5%. BTC is currently down at $64,500, and the rest of the crypto space followed. The only coins I see in the green on my watchlist are WOO and LINK. The rest are deeply in the red, with the worst performers being GRT, DYDX, and CURV.

So, how do we play this? First, I don’t play. I hold that’s the only thing I do that’s always worked out for me so far. For traders, though, it might be worth taking some risk off the table with the idea that the current worries will still take some days, maybe weeks, to play out. If you were hesitating to buy BTC at 68K, you might find 64K, 60K, or even 55K more attractive. The opportunity of getting in where you initially missed is presenting itself.

Otherwise, on the news and data front, the positive shift crypto has enjoyed so far isn’t going away. ETH futures’ global open interest topped $13 billion, which is just massive. The BITO and BTF had their biggest volume days in two weeks (granted maybe to sell, but still), and just yesterday, there were talks of Twitter setting up a crypto team to explore a decentralized app. We’re not stopping here. 

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