Pompliano: Inflation Cooling Tests Bitcoin Conviction
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- Pompliano said easing inflation tests whether Bitcoin investors can hold the asset without high day‑to‑day price pressure.
- Pompliano argued Bitcoin’s scarcity thesis hinges more on overall money‑supply expansion than on short‑term CPI fluctuations.
- Pompliano noted that many investors first turned to Bitcoin during a period of rising prices and aggressive monetary expansion.
- Pompliano warned that macro uncertainty and weak sentiment may pressure Bitcoin prices before any sustained recovery, citing the Crypto Fear & Greed Index’s drop to an "Extreme Fear" reading of 9.
- Pompliano observed Bitcoin trading near $68,850, down roughly 28% over the past month, highlighting price pressure amid deflationary forces.
- Pompliano predicted short‑term deflationary pressures will prompt policy responses such as rate cuts and liquidity injections, describing the situation as a "monetary slingshot."
Why it matters: Bitcoin investors lose confidence as inflation eases and price falls, while those betting on deflationary policies face short‑term volatility; the market’s fear gauge hitting extreme levels underscores heightened risk for traders, deterring new capital inflows and pressures the asset’s price trajectory.
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