Is Crypto Cooked Until 2026?
No Clear Catalyst in sight as a bad CPI print forced a large selloff
CPI increased to 3.3%, the hottest report since 2023, leading to a selloff in crypto and stocks.
Just a day ago, Jerome Powell said they are in no hurry to cut rates, which has massive implications for crypto and the stock market.
Post CPI, the market now projects only one rate cut this year, in October 2025. To top it off, the next rate cut is projected to be in December 2026!
This is a massive shift in policy from what was expected. The quantitative easing moon boys projected multiple rate cuts in 2025 and figured Trump would pressure Powell to start cutting.
With his legacy on the line, it doesn’t appear Jerome is willing to budge and is hellbent on hitting his arbitrary target of 2%.
But who cares about CPI? What does all this mean for our bags?
It’s not good.
Crypto is at an interesting point in the market cycle.
For the first time, crypto is working directly with the government on positive policy decisions.
Trump in office is extremely bullish in the long term, but his recent Tariffs are short-term bearish.
The bad news is that today’s CPI print doesn’t include Tariffs in the reading, which means inflation will likely be higher in a few months.
Is crypto destined to nuke even harder?
We just witnessed the largest liquidation event in the history of crypto while the Fear and Greed index sits at 35/100.
It can go lower, but not by much. The lowest the index has been in the last year is 26/100.
Simply put, there aren’t many sellers left, and they are exhausted.
However, that doesn’t mean we can’t get some time-based capitulation over the next several months when people start quietly giving up.
Additionally, sentiment is already extremely low.
So, are we in a bear market?
We could very well be, although no one in crypto wants to admit it.
If you post anything bearish on the TL, you get relentlessly attacked.
Many KOLs keep posting nonsense like “alt season is coming” and “the bull market hasn’t even started yet.”
These KOLs are merely engagement farming you, as bullish content always gets the most engagement as people seek confirmation bias on the TL.
Some of them are holding heavy bags and desperately trying to get unstuck.
We’ve had several massive rallies and hit peak euphoria multiple times over the last year. The Bitcoin low was $15,000, now at just under $100,000.
People deny this because many have held Ethereum while Solana 30xed and Bitcoin 6xed—several people printed millions on meme coins.
Where we’re at right now is similar to the summer of 2024 after the market peaked in April of that year.
This led to 8 months of market chop before we rallied when it was clear that Trump would be elected.
So, what now?
While everything seems max bearish right now, it’s not all bad.
Trump is in office, and everyone is working on positive policy changes for crypto.
The market will resolve higher in time, but it is tough to predict when.
As I said, we’ve already experienced the worst of the selling.
It’s the absolute worst time to sell when people are max bearish, and the TL is in shambles.
A chop market is excellent for accumulating your favorite coins for when the inevitable pump begins.
Whatever you do, don’t over-trade.
Research projects and DCA into them as the market digests the news.
This could last weeks or months. It’s tough to tell.
For now, hang on and survive.