The Flag of Victory?
It was a short week, but markets made it count.
Risk assets—from tech stocks to Bitcoin—got a boost as a trio of tailwinds aligned: decent U.S. economic data, Jerome Powell’s calm testimony to Congress, and a breather in geopolitical tensions. By the end of the week, the Nasdaq was clocking fresh record highs, the dollar was softening, and even crypto started flexing some muscle again.
Powell’s Balancing Act
On July 2nd and 3rd, Fed Chair Jerome Powell appeared before Congress and gave markets exactly what they wanted: nothing too hot, nothing too cold. He didn’t promise rate cuts, but his emphasis on “data dependency” was enough for investors to hear a dovish undertone. Powell admitted that given the data he would have already cut but the tariff uncertainty is keeping the Fed on hold. That subtle shift in tone was all risk assets needed. Equities rose, bond yields stabilized, and the U.S. Dollar Index lost some steam.
Translation? The Fed isn’t rushing to cut, but it’s not hiking either—and in a market searching for direction, that’s as close to good news as it gets.
Crypto: Coiled and Ready?
Bitcoin has spent weeks stuck in a consolidation range, but the price action is starting to look promising. A classic "flag" formation—a technical pattern often seen before breakouts—is forming, and the setup is increasingly bullish. It could propel BTC to new all-time highs.
Add to that the seasonal tailwind: July tends to be a good month for equities. If that rhythm holds and macro conditions stay benign, we could be looking at the beginning of a new leg up. But let’s be honest—crypto never moves in a straight line. Expect turbulence, especially with the July 9 deadline for potential Trump-era tariffs looming. A surprise headline in the trade war narrative could easily jolt markets.
Cautious Optimism
For now, the path of least resistance points upward. With tech flying, the dollar weakening, and Powell not rocking the boat, the rally has room to run. Just keep your seatbelt fastened—this ride may get bumpy before it gets better.