Bitcoin at critical support!

00:00:00: Investors maybe start to acknowledge the consequences of higher oil prices.

00:00:04: rising inflation expectations, more hawkish interest rate outlooks from the major central banks and the rest and an increasingly fragile market where a handful of AI winners only are masking broader economic weakness.

00:00:18: Will the latter lead to a sharp market correction or not is still to be seen.

00:00:23: but the stretch valuations especially in technology space and narrow-market bread are raising a few eyebrows maybe even just more than a few eye rows regarding sustainability of the current market rally.

00:00:35: So the persistent rise in oil prices aimed multiple strikes this week sent oil prices toward a hundred dollars per barrel level yesterday.

00:01:06: We are still just below that but risks are looking tilted towards upside.

00:01:12: And this time around, rising oil prices looked to be denting risk appetite across major equity markets.

00:01:18: The S&P five-hundred for example halted a nine day rally as yields rose on inflation bets Stronger than expected.

00:01:27: US data, meaning higher-than-expected ADP jobs report and faster and faster than expected expansion in ISM services also supported the view that The U.S doesn't need an interest rate cut in coming months.

00:01:41: No not when inflation threat is looming alongside the Middle East uncertainties.

00:01:46: Indeed the same set of data warn yesterday that input prices in the West rose at the fastest speed In almost four years Tariffs were brought back on the table.

00:01:58: Yes, Trump administration is now willing to slap ten or more percent tariffs on sexy trade partners To replace actual one-twenty two section tariffs that will expire soon pointing at forced labor Force labor concerning partners such as the European Union, United Kingdom and Switzerland.

00:02:20: I don't see much force labor around me today apart from The French not willing to work more than their thirty five hours per week.

00:02:27: To be honest.

00:02:28: but joke aside fresh tariffs of course are no good news when it comes to inflation expectations But no one knows whether they will remain in place Whether They Will Be ruled illegal by tomorrow or changed overnight.

00:02:39: for some reason.

00:02:40: Some say that the latest tweaks won't even increase average tariff rate by much.

00:02:44: Anyway, so tariffs or not activity on funds features today gives nearly forty percent chance for a rate hike in October already.

00:02:53: The rising energy prices are enough to justify a fat reaction to a prolonged period of heavy supply disruptions in the Middle East.

00:03:00: I note that this is an notable hockey shift compared to pre-Iran war expectations, up two to three cuts this year.

00:03:07: So as we progress toward the second half of this eventful year hope or flow where US trades evaporate by the day.

00:03:15: In reaction, The US Dollar gained yesterday supported both stronger than expected economic data from

00:03:22: U.S.,

00:03:22: that was fueling hawkish Fed expectations and higher oil prices as well negotiated in terms of U. S. dollars in international markets.

00:03:37: with the rising possibility of a direct FX intervention from Japanese authorities to sub-believing in Japan that is aggravating price pressures which are net importer energy and other raw materials.

00:03:52: Such rapid depreciation puts a lot on the Japanese economic outlook also keeping the Bank of Japan in limbo regarding whether to fight inflation or support growth.

00:04:04: Alas, The BOJ has no choice but to hide interest rates and truly reverse Yen's depreciation in the mid-term run.

00:04:11: Short term relief is costly and isn't best option when a problem comes from it – this equilibrium of monetary policy itself!

00:04:19: This said, the letter yo-yoing in the dollar yen around the one hundred sixty level creates excellent short term opportunities for tactical short positions for traders who obviously do have the nerves to wait until a potential intervention happens without being stopped.

00:04:35: But broadly speaking, The Federal Reserve, European Central Bank and the Bank of England may have resisted to raise hikes in the first weeks of the Iranian War but many central banks around the world took this step.

00:04:47: that includes Australian central bank Norway as well.

00:04:52: all these central banks raised interest rates fight inflation and the European Central Bank is expected to hike its policy rates next week, while the Bank of England could eventually hold fire in their next monetary policy meeting but will have to face the ugly truth policy meetings and high interest rates as well.

00:05:14: So what does it mean for broader markets?

00:05:16: It may be in trouble, we have seen major equity indices rally regardless of rising global yields ignoring the Middle East risk or prematurely pricing at end-of-the-war.

00:05:27: but prolonged war today and notably higher oil and energy prices do have concrete implications notably on central bank policies including investment decisions, corporate income and profit outlooks.

00:05:46: While the earnings expectations especially in technology heavy economies like the US Taiwan and South Korea are tilted toward upside on AI spending The rest of industries find themselves left struggling with higher borrowing costs supply chain disruptions, whether it's due to the Iranian war or trade wars with the US and weakening economic outlook.

00:06:09: If Middle East disruption persists into twenty-seven, global growth would slip by one point eight percent more in OECD instead of baseline forecast three points one per cent.

00:06:20: So this question remains the same how long could technology enthusiast master ugly fundamentals?

00:06:26: And could they really extend to rest of market?

00:06:28: The answer is yes!

00:06:30: Yes, it can.

00:06:31: If oil prices come down and pull yields lower we will see this market really extend further with joy!

00:06:37: And if not... The technology really could still extend as long as investors are willing to pay for the dream of an AI-filled future.

00:06:45: While SpaceX debuts due next week will certainly divert investor's attention away from the Middle East, giving maybe a fresh energy boost to technology lovers.

00:06:55: But eventually there're just too many lies flashing right at you moment to reel out the likelihood correction.

00:07:03: Look Wednesday after the closing bell, Worldcon failed to meet analysts' expectations on this new AI chip revenue forecast and stock price fell in the after hours.

00:07:13: trading crowd strike however fell to after beating expectations on his side.

00:07:19: His side.

00:07:19: that profit taking is becoming increasingly attractive when valuations look distressed and the rest of the fundamentals looked displayed was interesting.

00:07:28: in all this, however it's bitcoins decoupling from the technology space.

00:07:32: since last October The upside momentum in membership makers And now physical AI companies including PC makers have been so satisfactory indeed That Bitcoin's upside potential started looking bleak, suddenly.

00:07:47: Indeed investors preferred piling into other trades including SK Heineck, Samsung and Micron once actually printed higher returns than Bitcoin itself Perhaps partly explaining the deteriorating interest in the most popular cryptocurrency as well, rising yields and expectations that the interest rates will stay high for longer also weighted on betclaim more than they did.

00:08:09: On companies whose earnings are still growing rapidly thanks to AI frenzy.

00:08:15: And finally, MicroStrategy's Bitcoin sales were your last nail in the coffin.

00:08:19: The company didn't choose to sell its bitcoin holdings but it was forced do so pay back extra high dividend on its preferred shares.

00:08:27: It could have sold new stock But at least the companies valley has been dropping along with bitcoins making new stocks sales not that interesting.

00:08:35: So the Bitcoin is testing critical February support at the moment.

00:08:39: And a big issue here, as bitcoin price falls below its estimated mining costs around six thousand to seventy-thousand dollars per coin The last obvious valuation anchor is disappearing and without earnings cash flows or production cost floor to lean on.

00:08:55: there's little standing between bitcoins and sentiment driven meltdown in coming weeks.

00:09:00: Indeed Colossi traders now forecast that Bitcoins price will fall to below fifty thousand dollars this year.

00:09:07: Let's see if it does!

00:09:08: So, that is all for today.

00:09:10: I'm Yipega Skardeshkaya and thank you for joining me And Thank You For All Your Beautiful And Supportive Comments.

00:09:16: I hope This episode of Market Talk has been helpful.

00:09:20: It Has Been Insightful To You.

00:09:22: Please Do Not Hesitate To Leave Your Comments Your Reactions And Your Questions Below.

00:09:28: As Usual Follow us on Instagram On X On LinkedIn But Also On WhatsApp Threads, Telegram and BlueSky for regular market updates.

00:09:37: Subscribe to our YouTube channel for daily market commands And please don't forget to hit the like button on these videos To let us know that you enjoy them.

00:09:49: So I will meet again tomorrow.

00:09:51: Until then Good day

00:09:54: trading.

00:10:01: SwissQuote assumes no responsibility for accuracy or losses from its use.

00:10:05: Products and services are offered only where legally

00:10:08: permitted.".