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Saturday Jun 03, 2023

Cryptocurrencies: Short-term optimism

Last week, a small rally of cryptocurrencies and shares of US technology companies took place, which have been in correction mode since November last year. The growth of quotations of risky instruments in such conditions looks strange. Geopolitical tensions persist, and this, in turn, not only contributes to high uncertainty in commodity assets, but also aggravates the situation with inflation, which negatively affects the recovery processes in the global economy.

And then the Fed representatives said they were ready to raise the interest rate at every meeting until the end of the year, hoping at the same time for the absence of a negative effect on the labor market. The most interesting thing is that if there is a positive in the stock market, then investors are clearly afraid of a recession in the debt market: the difference between the yield of 2-year and 10-year treasuries has rushed to zero, which indicates serious doubts about the future of the American economy.

Usually values below zero are observed on the eve of crises.

Thus, it is not necessary to be deceived by a short-term change in market sentiment: for active asset purchases, it is worth waiting for more serious reasons to be positive, and they are not expected yet. In such conditions, BTC is quite capable of continuing to fall to the $35 thousand mark.