Bitfinex analyst Jag Kooner believes that Bitcoin and Ethereum are driven by the macroeconomic environment, which is pushing them to new highs.
Despite recent volatility, Bitcoin (BTC) and Ethereum (ETH) may be heading for another move higher. According to Jag Kooner, Head of Derivatives at Bitfinex, the current macroeconomic environment is favorable for digital assets. In particular, traders are looking at Federal Reserve guidance and consumer spending data, the Bitfinex analyst shared in a note with crypto.news on May 28.
For one, the Fed is under pressure from the potential inflationary effects of tariffs. If the Fed is worried about this, Kooner expects the rates will likely stay at their current level. However, core personal consumption expenditures may have a more direct impact on the dollar.
“The Core PCE data on Friday will be the most binary macro event. Market pricing expects stability; any downside surprise below 2.6% y/y (core) will trigger a compression in real yields and dollar softness, catalyzing capital back into crypto,” Jag Kooner, Bitfinex.
If the dollar falls, traders will be looking for other assets to protect their wealth. In this context, Bitcoin is a strong option. Kooner notes that institutional inflows are strong, with $1 billion net inflows into Bitcoin and Ethereum ETFs on the week ending on Sunday, May 25.
Is Bitcoin, Ethereum price set for another rally?
Notably, Ethereum may be driving the altcoin rally, suggests Kooner, noting that ETH was up 6% against BTC off local lows. What is more, Kooner states that this is not driven by retail demand, but more institutional interest.
“This is the beginning of what might become Phase 3 of the crypto bull cycle, where BTC strength stabilizes, ETH accelerates, and capital spreads out across selective altcoins,” Kooner noted about Ethereum’s recent growth.
Still, the timing of the potential rally will likely depend on the macro environment. If the Fed minutes and the PCE are favorable, this could trigger another rally.
“The underlying takeaway for traders: crypto isn’t overbought, it’s underallocated—macro just decides how quickly capital flows in,” he concluded.
