The Growing Case for ETH Outperformance in Q4
The US Dollar Wrecking Ball Continues
Last week, our near-term outlook remained uncertain, though we leaned toward the possibility that a positive catalyst, such as a victory for Grayscale, could coincide with easing liquidity conditions. This would mark a significant departure from the tightening conditions—indicated by the DXY—that followed the last two crypto-specific catalysts this year.
The likelihood of interest rates reaching a peak, the dollar beginning to decline, and liquidity conditions finding a local low was supported by several factors: (1) ongoing softening in U.S. economic conditions, which is disinflationary; (2) the RRP's continued drain back into the banking system, and (3) China's addition of liquidity to the market.
Technically, all three of those things have happened, unfortunately, due to prevailing weaknesses in the global economy, the liquidity China has injected into the global market continues to diminish when denominated in USD. Encouraging economic data from either China or Europe could certainly help counteract the recent increase in interest rates and the DXY.
There is also a particular importance in next week’s CPI reading, as continued disinflation coupled with strong economic growth moves us from a stagflationary picture (b...Reports you may have missed
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