Last week the crypto market continued to trade sideways.
This seems to be due to all the macro factors that have investors uncertain about where the markets will go next.
We appear to be on the brink of a Black Swan event that could take most cryptocurrencies to their bear Market lows.
Now one of the biggest macro factors that’s been weighing on the minds of investors is the ongoing war in Ukraine.
Four pro-russian regions in Ukraine recently voted to join Russia.
Now whether these votes were legitimate or not is a topic for another time and arguably irrelevant.
That’s because it doesn’t change the implications of the outcome Russia has reportedly vowed to use tactical nuclear weapons to protect its newly added regions.
This has led to serious concerns that a nuclear conflict of some kind is on the cards if that wasn’t bad enough two critical pipelines for transporting gas from Russia to Europe were blown up in what is believed to be an act of sabotage.
Who was behind this attack is likewise a topic for another time and again arguably irrelevant as it doesn’t change the outcome Europe is now much more likely to face gas shortages in the winter.
This risk is especially acute in Germany where the government is officially warning its citizens to conserve gas or else there will be shortages note that inflation in Germany also recently hit its highest level since World War II.
Now it doesn’t take an economist to understand that the European energy crisis is going to decimate the continent’s economy.
This is guaranteed to have spillover effects into other economies most notably the United States where the latest Q2 GDP revision confirmed that the US economy is shrinking.
The FED is ready to cause a severe recession to bring down inflation, this is according to Fed chairman Jerome Powell and let’s just say he’s not a man you should bet against these days.
On that note the PCI for August came in much hotter than expected last Friday.
The PCI is the FED’s favorite inflation measure – a high PCI reading increases the likelihood that the FED will raise interest rates even more aggressively when its officials meet again in early November between now and then we’ll see the CPI for September which will be released on Thursday the 13th of October.