The Growing Case for ETH Outperformance in Q4

Sep 7, 2023 • 6 Min Read

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 chart in this report is only accessible to members

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 (bad for the coins) to ...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Crypto subscription is required in order to access this content.

*Free trial available only on a monthly plan

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

Keep reading by starting your Free Trial today!

You are reading the last free article.

Already have an account? Sign In