They sold in May. Will they go away?
3 min read

They sold in May. Will they go away?

Cryptic ball: not the month we expected.

And the month of May has closed in all global markets. The S&P managed to end May at the same level where it started, after falling slightly today. However, both the Nasdaq and most cryptoassets experienced another red month. What's next?

  • Inflation fears in Europe are rising, but it seems the old continent is just late to the party. Still, top US Fed officials met Joe Biden this Tuesday to discuss the fight against rising prices. News of such discussion will move markets soon.
  • The more pessimistic Fed members want to keep hiking interest rates by 0.5% for "several" Federal Open Markets Committee meetings until inflation reaches 2%. Bears will attack if that view is echoed during June 15th's FOMC meeting, even if such hikes are expected in June and July with +95% probability.
  • Moreover, we must be reminded that it will also be this June that the Fed will start tightening, or tapering, its balance sheet. This will further reduce liquidity from the market and I'm not sure its ripple effects are fully priced in.
  • This has a positive effect though. As higher interest rates start hurting families due to the increase in mortgage costs, the Fed will face political pressure to ease the hikes and just focus on its quantitative tightening program.

While it's unclear the effect of such a move, I believe it's aligned with my updated outlook for the rest of the year. The summer will remain mostly stagnant in terms of prices, with a possible slow bleed in case this dead cat bounce is faded quickly. But by Q3 we should begin to experience some real relief and also have more clarity on what 2024 could bring to this highly chaotic world. Until then, BUIDL!

Chart art: not the decoupling we wanted.

Stonks up, alts down.

Three things: the alpha we needed.

Tweet tip: the kling for king.

Just hope though. Global inflation has ruined the party in the short term. 

Meme moment: not the emotion you need.

Trading should not be overly stressful. If it is, then you're gambling.

FV Bank: let's talk a bit.

Click on this image to schedule a chat with us!

Get started: download the B21 Crypto app!

Subscribe to our newsletter
Follow us on Twitter @b21official
Follow us on Twitter
Join our Telegram group
Find us on Instagram
Watch us on Youtube
Legal Notice
Our newsletter offers opinions and insights from analysts in the cryptoasset space. It is not intended to be investment advice, and should not be treated as such. You must not rely on its information as an alternative to financial advice from a qualified professional. Without prejudice, we do not undertake or guarantee that its information is correct, complete or non-misleading; or that the use of the guidance in the report will lead to any particular outcome or result.