According to recent analysis from Presto Research, the cryptocurrency market continues to feel the impact of persistent macroeconomic challenges, particularly inflationary pressures. As reported by COINOTAG on January 8th, both the Nasdaq and S&P 500 indices declined over 1%, driven by unexpectedly strong ISM data. This data has heightened concerns over inflation, contributing to rising bond yields, with the 10-year Treasury yield reaching levels not seen since April.
Rachael Lucas, a cryptocurrency analyst at BTC Markets, highlighted that traders are now forecasting the Federal Reserve will sustain elevated interest rates for an extended period. The market’s fluctuations were exacerbated by remarks from Fed Chairman Powell in December, which reinforced a hawkish monetary policy narrative and diminished expectations for rate reductions. As we approach January 20, when Trump’s inauguration is set to occur, market participants are bracing for further volatility due to potential shifts in policy.