Macroeconomic narrative shift—asset repricing from “Middle East war fires” to “rate-cutting hopes”

On April 14, the most core change in the market lies in the switching of the macro narrative. Over the past month or more, “Middle East conflict → oil price surge → runaway inflation → rate hike expectations” has been the key logic chain driving the crypto market decline. With the implementation of the two-week temporary ceasefire agreement and international oil prices falling from above $110 to the $96 area, the transmission power of this chain is now loosening.

Falling crude oil prices are the “first domino” in the macro narrative shift. On the morning of April 14, WTI crude fell to $96.56 per barrel, while Brent crude fell to $97.35 per barrel, with both setting recent new lows. As oil prices pull back from their highs, on the one hand, concerns about the Strait of Hormuz easing after the ceasefire have been alleviated; on the other hand, it also reflects market worries about demand amid expectations of a global recession. In any case, for crypto assets, falling oil prices mean that the urgency of “energy-driven inflation” is weakening.

But the return of “rate-cutting hopes” is not something that happens overnight. Although US banks continue to insist on predictions of “two rate cuts this year,” and CITIC Securities also still expects the Federal Reserve to cut rates by 25 basis points within the year, traders have generally already pushed back the expectation for the first rate cut to mid-2027. Public statements from Federal Reserve officials show that anchoring inflation remains the Fed’s current core goal, and future policy will depend highly on developments in the US-Iran negotiations, the trajectory of energy prices, and changes in inflation expectations. The Federal Reserve currently keeps the benchmark interest rate in the 3.50% to 3.75% range. In other words, the market is currently in a “bad news isn’t so bad” dull phase, and the real inflection point—whether it is rate cuts or another round of rate hikes—requires more explicit data signals.

For the crypto market, we are currently in a “macro buffer period”:

· Bullish factors: falling oil prices ease inflation anxiety, the US-Iran negotiations release geopolitical risk premium, and institutional ETF inflows continue to provide buying support (on April 14, the US Bitcoin ETF net inflow was 3,353 BTC, and the Ethereum ETF net inflow was 29,225 ETH).
· Bearish factors: the IRS tax-filing selling pressure is about to be released on April 15, rate-cut expectations are still pushed back to 2027, the US dollar index remains at a high level and suppresses crypto assets, and there is the risk that after the ceasefire expires on April 22, negotiations may break down again.

Overall assessment: current market pricing is between the loosening of the “old narrative” and the emergence of the “new narrative.” This “staggered” stage is often accompanied by relatively high volatility. For investors, rather than betting on a single direction, it’s better to use a “buy the dips and sell the highs” grid strategy within the wide range of $68,000 to $75,000, waiting for further clarity on the macro front.

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