Renowned financial analyst Nicholas Merten shared his insights on the current market landscape in a recent update. The CoinSpeech team gathered the most important highlights from his talk, focusing on the complexities in the macroeconomic environment. You can watch Nicholas Merten’s new video below.
Federal Reserve’s Impact on Markets
In his analysis, Merten focused on the recent Federal Reserve meeting, stating, “Despite all the requests, the federal fund rate remained unchanged.” This decision led to mixed reactions in various markets. The core CPI numbers came below forecast, initially encouraging, but the Fed’s less dovish conference led to a hawkish tone. This resulted in different assets responding with volatility.
Status of the US Dollar
Merten noted the surprising strength of the US Dollar amidst predictions of de-dollarization, explaining, “The DXY is actually showing incredible strength due to the FED decision.” He emphasized how the dollar’s value is bolstered by higher yields, compared to currencies like the Canadian Dollar and the Euro.
Bitcoin and Risk Assets
The focus then shifted to Bitcoin, which has shown sensitivity to Fed decisions. “Bitcoin operates quite positive in an environment where the Fed rate cut expectations are being discussed,” Merten remarked. However, recent unemployment claims data suggest the Fed might delay rate cuts, which could impact Bitcoin and other risk assets negatively.
Market Deleveraging
Merten suggested a probable slowdown, “For the medium term, I am still quite bullish,” but also advised that deleveraging in the markets could happen. Investors are pricing in the increasing risk of a recession, aligning their strategies accordingly.
Bitcoin Technical Analysis
Discussing Bitcoin’s technical positioning, Merten pointed out, “Bitcoin dominance, where it is right now, with overall market positioning, everyone is getting a bit into defense mode.” He explained how current price levels could lead Bitcoin to lower zones, setting the stage for potential rebounds depending on how the market accepts lower price ranges.
Ethereum Outlook
Switching to Ethereum, Merten observed, “We could not hold ourselves in the upper range and we start accepting down.” Ethereum, like Bitcoin, could be entering a choppy territory unless it shows acceptance above certain levels, making tight stop-loss strategies essential.
The Broader Picture
Further, Merten highlighted, “The broader picture signals me here the risk of attitude,” referring to the DXY’s impact on the market. The bullish market structure indicates a shift in the dollar’s trajectory, which will influence broader market conditions.
Altcoins and Market Sentiment
Concerning altcoins, Merten noted, “I want atam to start accepting above here and then I will be curious to long it.” He advised caution, favoring high-liquidity trading platforms for tighter control over slippages.
Silver and Miners
On commodities, particularly silver, Merten articulated, “I see that 28.5 is an absolute normal correction, just retesting of the previous high.” He emphasized patience amidst market corrections and reiterated his long-term bullish targets for silver.
Finally, Merten covered various sectors, including cannabis stocks, and shared preferences for decentralized exchanges due to liquidity concerns. He concluded by urging traders to avoid irrational exuberance and manage risks prudently in these uncertain times.