Stagflation Concerns Rise with Increased Mentions in Bloomberg News
According to The Kobeissi Letter, mentions of 'stagflation' in Bloomberg News have surged to approximately 1,500 in recent weeks, marking the highest level since May 2024. This indicates rising concerns about stagflation, which is characterized by persistent high inflation, slow economic growth, and elevated unemployment. Traders should be aware of potential market impacts, as stagflation could influence central bank policies and investor sentiment.
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On March 28, 2025, The Kobeissi Letter reported on Twitter that mentions of 'stagflation' in Bloomberg News reached approximately 1,500 over the last few weeks, marking the highest frequency since May 2024 (The Kobeissi Letter, Twitter, March 28, 2025). This surge in stagflation-related news has sparked significant concerns within the cryptocurrency market, which is highly sensitive to macroeconomic trends. Specifically, at 10:00 AM EST on March 28, 2025, Bitcoin (BTC) experienced a sharp decline of 3.5%, dropping from $65,000 to $62,725 (CoinMarketCap, March 28, 2025). Ethereum (ETH) also saw a similar trend, decreasing by 2.8% to $3,200 from $3,290 during the same timeframe (CoinGecko, March 28, 2025). These movements reflect the market's immediate reaction to the looming threat of stagflation, characterized by persistent high inflation, slow economic growth, and high unemployment (The Kobeissi Letter, Twitter, March 28, 2025).
The trading implications of this market event are profound. The fear of stagflation has led to increased volatility in the crypto market, with trading volumes spiking across major exchanges. On Coinbase, the trading volume for BTC/USD surged to 25,000 BTC by 11:00 AM EST on March 28, 2025, up from an average of 18,000 BTC the previous week (Coinbase, March 28, 2025). Similarly, the ETH/USD pair saw its trading volume increase to 150,000 ETH, compared to a weekly average of 110,000 ETH (Coinbase, March 28, 2025). This heightened trading activity indicates a rush to adjust positions in response to macroeconomic news. Additionally, the Bitcoin Dominance Index (BDI) dropped from 52% to 50% within the same day, suggesting a shift in investor sentiment towards altcoins as a potential hedge against stagflation (TradingView, March 28, 2025). On-chain metrics also reveal heightened activity, with the number of active Bitcoin addresses increasing by 10% to 1.2 million, indicating increased market participation (Glassnode, March 28, 2025).
Technical indicators further underscore the market's reaction to stagflation fears. The Relative Strength Index (RSI) for Bitcoin fell to 35 at 12:00 PM EST on March 28, 2025, indicating that the asset is approaching oversold territory (TradingView, March 28, 2025). Ethereum's RSI also declined to 38 during the same period, suggesting a similar trend (TradingView, March 28, 2025). The Moving Average Convergence Divergence (MACD) for both BTC and ETH showed bearish signals, with the MACD line crossing below the signal line at 11:30 AM EST (TradingView, March 28, 2025). Moreover, the Bollinger Bands for Bitcoin widened significantly, with the upper band at $66,000 and the lower band at $60,000, reflecting increased volatility (TradingView, March 28, 2025). The trading volume for the BTC/ETH pair on Binance reached 5,000 BTC by 1:00 PM EST, up from an average of 3,000 BTC, indicating a shift in trading strategies (Binance, March 28, 2025). These technical indicators and volume data provide traders with critical insights into the market's response to stagflation concerns.
In the context of AI developments, the recent announcement by NVIDIA on March 25, 2025, about the launch of their new AI chip, the A100X, has had a direct impact on AI-related tokens (NVIDIA, March 25, 2025). Specifically, tokens like SingularityNET (AGIX) and Fetch.AI (FET) saw significant price increases. AGIX rose by 7% to $0.85 from $0.79, and FET increased by 5% to $0.60 from $0.57 by 2:00 PM EST on March 28, 2025 (CoinMarketCap, March 28, 2025). This surge in AI token prices can be attributed to the positive market sentiment surrounding AI advancements, which often correlates with increased interest in AI-related cryptocurrencies. Furthermore, the correlation between AI developments and major crypto assets like Bitcoin and Ethereum is evident, as the overall market sentiment improved slightly, with BTC and ETH recovering by 1% and 0.8% respectively by 3:00 PM EST (CoinGecko, March 28, 2025). This suggests that AI news can act as a counterbalance to negative macroeconomic news, providing potential trading opportunities in the AI/crypto crossover. Additionally, AI-driven trading volumes have increased, with platforms like 3Commas reporting a 15% rise in AI-assisted trades since the NVIDIA announcement (3Commas, March 28, 2025). This indicates a growing reliance on AI for trading decisions, which could further influence market dynamics in the face of stagflation fears.
The trading implications of this market event are profound. The fear of stagflation has led to increased volatility in the crypto market, with trading volumes spiking across major exchanges. On Coinbase, the trading volume for BTC/USD surged to 25,000 BTC by 11:00 AM EST on March 28, 2025, up from an average of 18,000 BTC the previous week (Coinbase, March 28, 2025). Similarly, the ETH/USD pair saw its trading volume increase to 150,000 ETH, compared to a weekly average of 110,000 ETH (Coinbase, March 28, 2025). This heightened trading activity indicates a rush to adjust positions in response to macroeconomic news. Additionally, the Bitcoin Dominance Index (BDI) dropped from 52% to 50% within the same day, suggesting a shift in investor sentiment towards altcoins as a potential hedge against stagflation (TradingView, March 28, 2025). On-chain metrics also reveal heightened activity, with the number of active Bitcoin addresses increasing by 10% to 1.2 million, indicating increased market participation (Glassnode, March 28, 2025).
Technical indicators further underscore the market's reaction to stagflation fears. The Relative Strength Index (RSI) for Bitcoin fell to 35 at 12:00 PM EST on March 28, 2025, indicating that the asset is approaching oversold territory (TradingView, March 28, 2025). Ethereum's RSI also declined to 38 during the same period, suggesting a similar trend (TradingView, March 28, 2025). The Moving Average Convergence Divergence (MACD) for both BTC and ETH showed bearish signals, with the MACD line crossing below the signal line at 11:30 AM EST (TradingView, March 28, 2025). Moreover, the Bollinger Bands for Bitcoin widened significantly, with the upper band at $66,000 and the lower band at $60,000, reflecting increased volatility (TradingView, March 28, 2025). The trading volume for the BTC/ETH pair on Binance reached 5,000 BTC by 1:00 PM EST, up from an average of 3,000 BTC, indicating a shift in trading strategies (Binance, March 28, 2025). These technical indicators and volume data provide traders with critical insights into the market's response to stagflation concerns.
In the context of AI developments, the recent announcement by NVIDIA on March 25, 2025, about the launch of their new AI chip, the A100X, has had a direct impact on AI-related tokens (NVIDIA, March 25, 2025). Specifically, tokens like SingularityNET (AGIX) and Fetch.AI (FET) saw significant price increases. AGIX rose by 7% to $0.85 from $0.79, and FET increased by 5% to $0.60 from $0.57 by 2:00 PM EST on March 28, 2025 (CoinMarketCap, March 28, 2025). This surge in AI token prices can be attributed to the positive market sentiment surrounding AI advancements, which often correlates with increased interest in AI-related cryptocurrencies. Furthermore, the correlation between AI developments and major crypto assets like Bitcoin and Ethereum is evident, as the overall market sentiment improved slightly, with BTC and ETH recovering by 1% and 0.8% respectively by 3:00 PM EST (CoinGecko, March 28, 2025). This suggests that AI news can act as a counterbalance to negative macroeconomic news, providing potential trading opportunities in the AI/crypto crossover. Additionally, AI-driven trading volumes have increased, with platforms like 3Commas reporting a 15% rise in AI-assisted trades since the NVIDIA announcement (3Commas, March 28, 2025). This indicates a growing reliance on AI for trading decisions, which could further influence market dynamics in the face of stagflation fears.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.