The Crypto Weekly Lookout: April 11th, 2022 edition

Overview

Last week, markets were hit by hawkish comments from FOMC member Lael Brainard while the Fed’s March minutes release was also poorly received with its emphasis on significant balance sheet reduction. Will Fed statements whip around the markets again this week?

Understanding macro linkages and shifts in Fed policy is currently the name of the game as financial markets are increasingly rising and falling together. In fact, as of April 8th, the 40-day correlation between Bitcoin and the tech-heavy Nasdaq 100 hit 0.6945 according to Bloomberg. The closer to 1, the stronger the correlation.

It seems the macro situation’s downside bias is growing stronger, but there still remains crypto-specific opportunities as the new asset class is developing more and more with each passing day.

Crypto

Sentiment in the crypto market according to the Crypto Fear & Greed Index has dropped to the fear zone whereas it was in the neutral zone last week. Today’s market bloodbath has seen the total crypto market cap fall all the way to $1.85 trillion. It was above $2 trillion just yesterday.