It's never a dull moment in these markets.
Bitcoin fell to the lowest since Trump was re-elected earlier today, touching $72,903. That was below the Liberation Day low and painted an ugly potential candle on the chart.
But it may have been a trap. After the weak hands were shaken out, the buyers stepped in and have taken it all the way up to $76,250, more than $3000 above the lows. The bounce in ethereum has been even larger, rising to $2300 from a low of $2109.
There has also been some buying the stock market with the S&P 500 coming off the lows but with nowhere near the strength of crypto.
In all of markets, it's been one day after another of wild moves. Gold and silver continue to be extraordinarily volatile while we've seen some shocking moves this year in Japanese bonds, USD/JPY, Microsoft shares and more. That kind of volatility is symptomatic of something beneath the surface in the markets but it's hard to pin down what's happening. That said, it's almost never good. Bull markets are built on steady buying, not high volatility.
Maybe it calms itself down after earning season and we got some good news today with the US government shutdown ending but I also worry that things are happening in the real economy that could be de-stabilizing. This week's ISM manufacturing number was very strong and the old economy stocks are surging today. Could we have to start thinking about a re-acceleration in the economy and cancelling the rate cuts that are pencilled in? How would the market respond?
Moreover, if rates are cut anyway into a hot economy, that raises worrisome questions about inflation down the road. Mixed in with all that are worries about AI spending and what the models might produce next, and if that will be enough.
