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It was a rough day to be an investor in risk assets. The S&P 500 dropped 0.59%, the Nasdaq fell nearly 1%, and Bitcoin gave back some of its recent gains as August's Producer Price Index came in hotter than expected, reviving fears the Federal Reserve might hike rates rather than cut them.
In general terms, almost 85% of all crypto assets today in the top 100 by market cap have lost ground in the last 24 hours. Oil pushing above $100 a barrel amid ongoing U.S.-Iran tensions isn't helping the inflation math either. Treasury yields spiked to multi-year highs on the news, squeezing anything that isn't a Treasury bond.
With Friday's Consumer Price Index report and the Fed's September 15 meeting both looming, markets are bracing for more volatility before the week is out.
It may look dicey in the near term, but investors who zoom out will find that, on the Bitcoin chart at least, there's a pattern beginning to form that's been historically a very bullish signal.
