Navigating Turbulence: The Dollar, The Fed, The SEC, and the Crypto FUD

Happy Tuesday to everyone! I hope you all had a fantastic weekend. This week, I challenge you to make someone happy. I know how it feels whenever we experience a lack of motivation, but if you include one small little change in your life (such as making someone smile every day), then your life will turn around.

In today's post, we will discuss the recent price action of the $DXY (US Dollar Index) and $BTC.

Let’s dive in.

PMI Report: How it Affected the Dollar

PMI News came in hot on Monday morning and gave investors a little jump, starting off the week. But what does it mean for the market when PMI news comes in lower than expected?

When the PMI news is less positive than anticipated, it typically means that the sector's activity is weaker than projected. For our purpose, we are concentrating on the US Dollar, but this may have other market repercussions as well.

Weaker PMI data may cause the currency of the target nation or area to depreciate. The currency may lose appeal to investors in a slower-growing economy, which could result in currency devaluation. The dynamics of import and export as well as foreign investment flows may be affected by this.

Seeing PMI come in lower than expected, we witnessed a noticeable reaction when that news came out, making Monday a bearish day for anything related to the US Dollar.

Some investors may also factor in that a lower PMI may indicate that the Fed may pause interest rate hikes instead of raising them this month, which would also be bearish for the Dollar.

SEC Sues Binance & Coinbase: How it Affected $BTC & $ETH

We didn't have an amazing start to the week when it came to the crypto space, as we saw the SEC sue Binance and Coinbase over a violation of securities, but what actually happened, and what does the SEC coming after Binance mean for the space? And what should you do?

With the recent news coming out (which has been under the radar for a while now), we saw around a 6% drop in BTC. Additionally, there was a major outflow of $1.5 million from Binance as the SEC's action has investors and traders worried about the future of Binance, but is this really anything new?

Not really.. There has been a common and consistent battle between the Government and Decentralization for a while now.

Keep in mind this action by the SEC is on Binance US which only makes up around 2% of the exchanges volume.

As I stated above, I don't think this news is something that should spark a market crash, at least for now. The debate over what constitutes a security versus a commodity has been ongoing for years. However, it doesn't necessarily mean that the crypto space will recover within a few days after this "FUD" (Fear, Uncertainty, and Doubt).

There is still a lot that needs to be fixed, and if we want more money to enter the market, regulations are necessary. I mentioned a while back that the rally we experienced towards 31k was not an organic move. We observed a decrease in volume and the overall fundamentals remained highly bearish. This event further adds to the bearish fundamentals.

I also believe it's wise to withdraw from all exchanges. You never truly know what is happening behind the scenes, even at a large exchange like Binance. Many exchanges have done and will continue to do questionable things to their customers. Ultimately, when customers lose, the exchanges win.

Conclusion

Overall, I hope this write-up gives you a better understanding of where we stand in the markets. I believe we may continue to see a slight decline in the crypto market and a continuation of the downtrend. However, I don't think this news should or will crash the markets for now, unless new information emerges that we have been unaware of for several years.

If you have not please also check out my first post on this newsletter as it goes over the potential ranges we could see $BTC range towards.

Always remember, there is no reason to force a trade. Let the market come to you..

I hope the above content has provided you with a better understanding of the overall market. If you have any questions, feel free to DM me on Twitter @TheOnlyNotice!