At, ComiBlock our analyst team meets every week to look at the market and discuss price trends, macro shifts, and general crypto on-chain activities. And this week, we discussed key issues that have impacted the crypto-market in recent months; what market participants see; a full trend reversal or pullback within the broader macro trend.
The issues we looked at
How investors will react to the Fed’s tighter monetary moves: Given rising inflation in the US, the US Fed is becoming more hawkish. As a result, investors have been increasing expectations for tighter monetary policy, which has driven interest rates higher and risk asset valuations lower.
How geopolitical events can affect our investment portfolios and the Crypto market. The ongoing Russian buildup of military forces on the Ukrainian border has caused the US and its allies to start preparing for any additional escalation. While geopolitical risks with China and Taiwan have been in focus for investors over recent months.
Here are a few takeaways from our meeting
- We think that recent price actions have taken bubbles out of many pockets and caused investors to shift focus from liquidity to fundamentals. We believe opportunities still exist to buy attractive crypto assets, with strong growth prospects and network effects, at compelling valuations regardless of the Fed’s actions.
- Also, we believe that financial markets are more connected than ever before, and daily headlines on geopolitical events now play a role in financial markets. We think the traditional market sees war tensions as a risk-off signal. And in risk-off situations, investors become more risk-averse and sell assets, sending their prices lower.
- However, we believe that crypto typically acts as a risk-on asset; In risk-on situations, investors have a high-risk appetite and bid up the prices of assets in the market. And the crypto markets have historically benefited from rising geopolitical risks, and the escalating tensions could offer a catalyst for price.
Overall, long-term holding convictions and network activity are slowing; on-chain indicators show that the broader macro trend isn’t necessarily over yet. Still, the market remains in a state of stance as the bulls continue to battle the bears in their fight to maintain the multi-year uptrend.
Have a great weekend
These are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision.