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Market Update: Wed 15th Nov
$750m of OI wiped out in crypto
The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
**MACRO** - So yesterday we had a very "strong" inflation number, with headline coming in at 3.2% and core at 4%, both 0.1 pps below expectations. As a result we saw a mega rally in risk assets with stocks closing 2% higher on both the SPX and NDQ and futures up another 0.5-0.6% once again this monrning. Not only that, but interest rates squeezed very aggressively which now takes 2Y to 4.85% and 10y to 4.49%. Honestly I think if we get 1-2 months more of low inflation and low payrolls there is going to be A LOT of chatter about rate cuts...at the moment most people expect it to happen H2 next year which really isn't far away now when you think about it, but the rumours and speculation will intensify and this will be good for risk assets. I think we are nearing potentially another bullish period for risk which could see equities make new ATHs next year if the Fed is able to cut rates ahead of any potential recession should they deem inflation to be under control.
**CRYPTO** - It feels like yesterday we got the big leveraged wipeout we were looking for with something like $750m of OI wiped out as BTC dropped as low as 35.9K and ETH as low as around 1970. We've since bounced back pretty strongly with levels back above 36K and 2K, while SOL and AVAX have both gone on another tear up to $62 and $19.38 respectively pretty much marking YTD highs for them both. This is where leverage is dangerous and it sucks for those who had levered longs to watch positions get liquidated only to see the market very quickly bounce back and resume higher, it's why it's always important to have ample spot positions in this kind of volatility, and be extra savvy with the levered trading. We have 2.5 days left to see if we get an early BTC approval this week, it feels like any approval would be a positive surprise while any further prolonging might be welcome by those trying to build positions. I think it's still going to be an interesting end to the year.
**NFTs** - Looks like prices are mostly unchanged but it's the memeland ecosystem that continues to rise aggressively with $MEME hitting new ATHs, currently at a price which is almost double from where it launched and sitting at a whopping $2.6bn fully diluted market cap. That entire ecosystem has been a real true winner for anyone who has gotten involved and played it to be honest, and there is a lot of accrued airdrop in each NFT while the NFTs trade at a big discount; comes down to a question of how much you want to discount the future value of the tokens. Elsewhere in terms of larger sales we continue to see good volumes in punks while there was a 69ETH sale on a 4-trait ape. On the whole activity continues to be very high and I think we can expect to see more of it to come over coming weeks.
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