👉👉👉 Bitcoin, #Ether Nurse Losses as U.S. Stagflation Fears Grip Market

Bitcoin and ether are trading lower in Asia as the business week begins, signaling a mix of bullish & bearish sentiments for the market.

The #CryptoMarkets are currently in the red, reflecting renewed concerns about U.S. stagflation, considered a worst-case scenario for risk assets.

Bitcoin, the top #cryptocurrency by market capitalization, hovers around $62,400, marking a 2.5% decline over the past 24 hours, while ether (ETH) is down 3%, trading at $3,200. The CoinDesk 20 (CD20), tracking the most liquid digital assets, has decreased by 2.6% to 2,197 points.

QCP noted over the weekend the looming threat of stagflation, characterized by high inflation & low growth. The weaker-than-expected U.S. GDP report indicates a sluggish economy, while the higher Core PCE index signals persistent inflationary pressures challenging the Federal Reserve.

Last week's U.S. GDP report revealed the economy expanded by an annualized rate of 1.6% in Q1, down from the previous quarter's 3.4% growth. The PCE index, the Fed's preferred inflation measure, showed a rise to a 3.4% annualized rate in Q1, up from 1.8% in Q4 2023.

Slower economic growth and persistent inflation reduce the likelihood of Fed rate cuts. Most traders on Polymarket still see no rate cuts as the most probable scenario (35% probability), but the likelihood of one rate cut has increased to 29%.

QCP highlighted Janet Yellen's fiscal strategy, leveraging the Treasury General Account (TGA) and the Reverse Repurchase Program (RRP) to inject up to $1.4 trillion liquidity into the financial system, potentially boosting all risk assets.

The impending U.S. Treasury's quarterly refunding announcement, determining whether the current TGA balance of $750 billion is maintained or reduced, is crucial for the bitcoin bull market.

The launch of bitcoin exchange-traded funds (ETFs) in Hong Kong on April 30 attracted attention, though news that mainland Chinese investors won't be able to trade these ETFs has dampened optimism.

Source - coindesk.com