The World Liberty Bid, ETH Momentum, and MSTR's Nasdaq 100 Prospects

Dec 12, 2024 • 5 Min Read

Core Strategy

Our base case assumes that the macro environment will remain accommodative for crypto through year-end. However, in light of recent market action, we remain alert for signs of a local top (not a cycle top). That said, it is difficult to justify a risk-averse stance at this stage and think it is right to lean into this altcoin rally.

The chart in this report is only accessible to members
The chart in this report is only accessible to members

Strong Dollar + UST Supply Drove Today’s Weakness

The crypto market’s weakness earlier this week stemmed from broad macro derisking ahead of the CPI release. We anticipated that this setup shifted risk asymmetries to the upside post-CPI, which proved correct as CPI matched expectations, leading to a strong risk asset rally. Fed Funds futures showed increased confidence in a lower path for rates over the coming months.

However, despite this constructive backdrop, yields on the 10Y and 30Y treasuries rose sharply on Wednesday and Thursday, contributing a cross-asset weakness that eventually impacted crypto this afternoon.

While BTC remained resilient through most of the day, it succumbed to the broader macro pressure in the afternoon, erasing its earlier gains.

The chart in this report is only accessible to members
The rise in yields following CPI has puzzled many, especially given that the print showed housing prices...

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