The crypto market is in poor condition due to unfavorable macroeconomic conditions. Added to this is the Fed's high tendency to increase interest rates to curb high inflation. However, experts are optimistic that starting November and beyond can bring momentum to the crypto market.
Stock market analyst Cantering Clark shares information and Twitter data highlighting stock market performance before and after the midterm elections. The US midterm elections are expected to be held on November 8, 2022.
Based on the data, the stock market generally performed poorly in the months leading up to the midterm elections. Conversely, stocks almost always soar in the months after an election, regardless of the performance of the president's party.
According to Clark, this scenario happened especially in the 1970s. Experts believe that the decade of the 70s had almost the same macroeconomic conditions as today.
In the 12 months leading up to the election, the market fell by 13% in 1966, 15% in 1970, and 32% in 1974. However, the market rebounded by 17%, 13%, and 20%, respectively, during 12 years after the election.
Clark added, the year 1974 has significant similarities with the current macroeconomic situation. The inflation level reached 8.8% in the same period. As a result, the stock market fell almost to 32%. However, the market recorded a strong recovery of 20% after the election.
Clark stated that the current market behavior is almost the same based on the amount of trade realized. Therefore, the months of November and December may bring relief to market players.
The crypto market is closely related to the stock market since 2020. Crypto assets behave similarly to technology stocks and the technology-oriented NASDAQ. Finally, it should be noted that a survey by Bloomberg revealed that economists believe that the Fed will remain hawkish until 2023. Therefore, the Fed's quantitative tightening could spoil the historical trend this year.
