Crypto Markets Remain Stuck in Downtrends Amid Rising Rates and Strong Dollar
Crypto markets remain largely unchanged over the past two weeks, with prices stuck in steady downtrends and recent rallies proving weaker than earlier gains this year. Wolfe Research strategists Rob Ginsberg and Read Harvey now side with bearish investors on the sector.
Ginsberg and Harvey pointed out that neither a broader risk-asset rally nor recent geopolitical turmoil and rising inflation have been enough to reverse crypto's trajectory. They struggle to come up with a near-mid term bull thesis on the group, citing rates and the dollar as two of the most important drivers.
The strategists noted that elevated long-bond yields have historically weighed on risk assets broadly, but this time the pressure has fallen primarily on Bitcoin (BTC) and crypto. With the 10-year yield heading toward 5%, they said that headwind is unlikely to abate soon. Ginsberg and Harvey expect 'the next move will be to the downside' for Bitcoin, with the world's largest cryptocurrency not even generating enough momentum this time to reach overbought territory.