February 19 REX Wire Market Outlook

Bitcoin is strong, but are alts about to have a day in the sun?

Will that CPI data slow down the markets?

The markets are strong going into the new week. The S&P 500 corrected a little on the worse-than-expected inflation data last week, but has now recovered over 5,000. The Nikkei hit a 34-year high, with global stocks generally doing well.

The dollar, too, has dropped. Following that unwelcome CPI print, the DXY pushed upwards, almost touching 105. It seems like this was an overreaction, though, and it's now back around 104.2, targeting the 104 support. If that breaks, lower is likely.

US CPI Comes In Hot
With inflation coming in above expectations, any remaining hope of a March rate cut will be dashed.

Although inflation isn't yet back to where the Fed wants, the wider (medium-term) picture is reasonable, with the economy growing at an annualized 3.3% for Q4 2023. That's more than can be said for the UK, which slipped into recession at the end of last year—though in reality, growth in the UK is more flat than negative.

Crypto Stays Strong

Bitcoin had a good week last week, gaining $4,000 or over 8%. It dipped at the weekend, falling more than $2,000 from a $52,900 high earlier in the week, before recovering quickly.

Meanwhile, ETH topped $2,900 for the first time in almost two years. ETH is still close to a three-year low in BTC terms, but may now have bottomed out. It's trading around 0.056 BTC; its previous high in December 2021 was 0.088 BTC. (At current bitcoin prices, that would put it at $4,600, close to its all-time high.)

A number of alts are putting in strong performances, too. The total crypto market cap stands at $1.9 trillion. Bitcoin Dominance appears to be consolidating around 53%, and its unclear which direction it will take next.

Last week saw strong inflows into the bitcoin ETFs, despite bankrupt crypto lender Genesis offloading GBTC. Retail investors appear to be happy to let BlackRock take bitcoin off their hands.

The coming week promises to be another big one, as momentum builds and the stacking continues.

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