After yesterday's worrying comments by central bankers, disappointing US GDP numbers increased the fear of recession. Sharper downtrend continued all across the markets today as well, as market participants thought more about the possible aspects of the recession.
While we are getting closer to the last hours of the year's first half, with today's fall, we will have one of the worst H1 in history.
Aggressive monetary tightening policies are the primary concern!
At the time of writing, the German DAX is trading 2.5% lower, the CAC 40 in France fell 2.4%, and the UK's FTSE 100 dropped 1.7%.
The major indices in Europe, Asia, and the US futures market will print significant losses this month.
While inflation fears lead the bears to the risky assets, concerns about the fate of the Ukraine war are why investors are trying to hold themselves back from more investment.
It is not surprising to see risky assets losing their attraction in such a market condition. Bitcoin and other cryptocurrencies are considered high-risk investments.
From the technical point of view, as you can see below, BTC moves in the opposite direction with market risk. Therefore, as long as we have the risk at higher levels, with USVIX above 27, risky assets will still be under more pressure.