Why macro shakes crypto
• A large part of crypto prices depends on the money circulating in the system (liquidity)
• When interest rates rise, money is pulled back and water drains from risk assets — crypto rides that flow
How to read the indicators
• CPI and employment are inputs that let the market bet in advance on 'will the Fed tighten or loosen further'
• So what moves price is not the released number itself but 'how it compared with expectations'
Where people slip
• They see crypto only through technology and good news and do not look at the flow of money (liquidity) — big cycles are made by macro
Crypto follows the flow of money, not technology. The macro calendar is the backdrop to direction.
Do you know the dates of the next FOMC and CPI, and do you consider their effect on liquidity?