Market Compass
The Challenging Month of November Continues
As Darkex Research, we have been indicating in 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 in valuations. Both the “liquidation crisis” on October 10 and the sharp value losses on November 11 produced results in 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 in 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 on Wall Street. Concerns that these companies were overvalued and had become a bubble had already been on the agenda for some time. The second major dynamic was the clearer understanding that the US Federal Reserve’s (FED) interest rate cut in 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 on December 10. In parallel with this, significant declines were observed in the pricing of December interest rate cuts in the markets.
Within this ecosystem, heavily influenced by these two main variables, cryptocurrencies found themselves among the asset classes that suffered deep wounds. There is a topic we often mention in our analyses. In addition to current liquidity conditions, changes in investors’ expectations about future liquidity conditions also cause the market to shift from time to time. We attribute what we have experienced in the last two months to changes in 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 on 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 in the near-term investment horizon. We will continue to seek answers to questions such as: “Has a bubble formed in 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 on the intuitive abilities of the pilots of a Boeing that has landed on 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, in 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 in the short term.
Next week, while awaiting information on when US data will be released, we will be looking for clues in the minutes of the FOMC’s latest meeting regarding the path of interest rate cuts. Additionally, some PMI indicators ( ) will provide us with information about developments in 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 minutes of each meeting three weeks later. These minutes, which are a detailed record of the FOMC meeting, allow us to see which economic and financial factors influenced the vote on setting interest rates and may provide clues about the FED’s next move. A more “hawkish” stance than expected could put pressure on digital asset prices, while minutes containing relatively “dovish” messages could support gains.
Due to the disruption in the macroeconomic indicator release calendar caused by the government shutdown, FOMC minutes have become even more important for predicting the Fed’s next move. Based on 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% in recent weeks. Given this shift, the minutes 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 on manufacturers participating in a survey in 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 in 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 on 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 in 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 on 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 by 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 on UTC (Coordinated Universal Time) time zone. The calendar content on the relevant page is obtained from reliable data providers. The news in the calendar content, the date and time of the announcement of the news, possible changes in the previous, expectations and announced figures are provided by 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 in the daily reports for possible changes in the content and timing of data releases.
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