Market Compass
The Challenging Month of November Continues
As Darkex Research, we have been indicating en both our weekly newsletters and monthly strategy reports that the digital asset market may be facing a challenging period. We emphasized that the dynamics shaping the direction of global capital markets were not creating a positive equation for cryptocurrencies, and that this would be reflected en valuations. Both the “liquidation crisis” el October 10 and the sharp value losses el November 11 produced results en line with our projections.
The US government shutdown ended with the latest agreement. However, macro indicators will not be released immediately, and some data may not be released at all. For example, we may never learn the unemployment rate for September or October en the world’s largest economy. However, there were other reasons behind the recent value losses of digital assets. The first was the sell-off of AI-based technology companies el Wall Street. Concerns that these companies were overvalued and had become a bubble had already been el the agenda for some time. The segundo major dynamic was the clearer understanding that the US Federal Reserve’s (FED) interest rate cut en December was not a “guarantee.” FOMC officials are divided, but some have clearly stated that they will not support a new interest rate cut at the next FOMC meeting, which will be completed el December 10. In parallel with this, significant declines were observed en the pricing of December interest rate cuts en the markets.
Within this ecosystem, heavily influenced por these two main variables, cryptocurrencies found themselves among the asset classes that suffered deep wounds. There is a topic we often mention en our analyses. In addition to current liquidity conditions, changes en investors’ expectations about future liquidity conditions also cause the market to shift from time to time. We attribute what we have experienced en the last two months to changes en previously established equations. Some evidence of this includes gold continuing its rally after a brief pause, bond yields turning upward again, and major stock indices experiencing sharp corrections el some days.
It appears we will see periodic news flow regarding Trump’s tariffs. Furthermore, negotiations between China and the US could continue for months before we can declare the trade wars over. Beyond that, the variables mentioned above will continue to dominate prices en the near-term investment horizon. We will continue to seek answers to questions such as: “Has a bubble formed en technology companies?“, “Will the Fed cut interest rates?“, and “Are the negative effects of the US government shutdown significant enough to cause a recession?” To do this, we need data. We will be able to make more informed decisions when the calendar of employment and inflation indicators is gradually released and we can see the data. Right now, we are relying el the intuitive abilities of the pilots of a Boeing that has landed el this runway before, even though none of its indicators are working. In this environment, it is only natural for investors to reduce their risky positions. Digital assets have also fallen victim to this situation. Nevertheless, en light of recent developments and fragments of information, we maintain our long-term bullish outlook for major cryptocurrencies and believe that the search for equilibrium will continue to cause volatility en the short term.
Next week, while awaiting information el when US data will be released, we will be looking for clues en the minutos of the FOMC’s latest meeting regarding the path of interest rate cuts. Additionally, some PMI indicators ( ) will provide us with information about developments en the world’s largest economy. We will discuss these separately below.
November 19 – FOMC Minutes
The US Federal Reserve (FED) holds eight Federal Open Market Committee (FOMC) meetings each year and publishes the minutos of each meeting three weeks later. These minutos, which are a detailed record of the FOMC meeting, allow us to see which economic and financial factors influenced the vote el setting interest rates and may provide clues about the FED’s next move. A more “hawkish” stance than expected could put pressure el digital asset prices, while minutos containing relatively “dovish” messages could support gains.
Due to the disruption en the macroeconomic indicator release calendar caused por the government shutdown, FOMC minutos have become even more important for predicting the Fed’s next move. Based el the latest statements from FOMC officials and the CME FedWatch Tool, the probability of a rate cut at the Fed’s December meeting had fallen below 50% at the time of writing, whereas we had seen pricing above 90% en recent weeks. Given this shift, the minutos from the FOMC’s October meeting will be closely scrutinized.
Other Important Macroeconomic Indicators or Developments
November 17 – Empire State Manufacturing Index; This is a diffusion index based el manufacturers participating en a survey en New York State. It is published monthly, around the middle of the current month, and values above 0 indicate improving conditions, while values below 0 indicate deteriorating conditions. It covers approximately 200 manufacturers en New York State and is compiled from a survey asking participants to assess the relative level of general business conditions. Data above expectations may have a positive impact el digital assets.
November 21 – Flash Manufacturing PMI is a leading indicator of economic health. Businesses react quickly to market conditions, and purchasing managers may have the most up-to-date and relevant predictions about the company’s economic outlook. The Purchasing Managers’ Index (PMI) is a survey of approximately 800 purchasing managers, asking participants to assess the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories. A reading above 50.0 indicates expansion en the sector, while a reading below 50.0 indicates contraction. There are two versions of this report, Flash and Final, published approximately one week apart. The Flash version is released as a leading indicator el a monthly basis, around the third week of the current month. Data below expectations may positively impact crypto assets through pricing related to the Fed’s interest rate cut path.
**Important Notice Regarding US Data
Although the US government has reopened, the release of several key economic data points from agencies appears likely to continue to be affected. Data scheduled for release por the Bureau of Economic Analysis (BEA), the Bureau of Labor Statistics (BLS), the Census Bureau, and the U.S. Department of Agriculture (USDA) may not be published, may be delayed, or may be postponed. Affected data may include the Employment Situation Report, Gross Domestic Product (GDP), Consumer Price Index (CPI), and agricultural reports, but is not limited to these.
Important Economic Calendar Data
Click here to view the weekly Darkex Crypto and Economy Calendar.
Information
*The calendar is based el UTC (Coordinated Universal Time) time zone. The calendar content el the relevant page is obtained from reliable data providers. The news en the calendar content, the date and time of the announcement of the news, possible changes en the previous, expectations and announced figures are provided por the data provider institutions.
Darkex cannot be held responsible for any changes arising from similar situations. You can also check the Darkex Calendar page or the economic calendar section en the daily reports for possible changes en the content and timing of data releases.
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