Macro Narrative Shift — From “Middle East War” to “Hopes for Lower Interest Rates” in Asset Rebalancing

April 14, the most significant change in the market is the shift in macro narrative. For over a month, the main logical chain leading to the decline in the crypto market has been “Middle East conflict → surge in oil prices → uncontrolled inflation → expectations of interest rate hikes.” And as a temporary ceasefire agreement was reached for two weeks and international oil prices rebounded from above $110 to around $96, the transmission strength of this chain has begun to weaken.
The decline in oil prices is the “first domino” in the macro narrative shift. On the morning of April 14, WTI crude oil fell to $96.56 per barrel, Brent crude fell to $97.35 per barrel, both marking recent new lows. The drop in oil prices from these highs was partly due to easing concerns about the Strait of Hormuz shipping routes after the ceasefire, and also reflected market fears of global demand triggered by recession expectations. Anyway, for crypto assets, the decline in oil prices means that the “energy boost to inflation” is becoming less urgent.
However, hopes for interest rate cuts do not immediately return. Although US banks still predict “two interest rate cuts this year,” and CITIC Securities also expects the Federal Reserve to cut rates by 25 basis points this year, traders generally delay expectations for the first rate cut until mid-2027. Open statements from Federal Reserve officials indicate that maintaining inflation remains the primary goal at present, and future policies will heavily depend on developments in Iran-US negotiations, energy price trends, and changes in inflation expectations. Currently, the Federal Reserve maintains the benchmark interest rate in the range of 3.50% to 3.75%. In other words, the market is currently in a “not-so-bad bad news” phase, where turning points—whether rate hikes or cuts—require clearer data signals.
For the crypto market, it is currently in a “macro buffer period”:
· Positive side: falling oil prices ease inflation concerns, Iran-US negotiations reduce geopolitical risk premiums, and institutional ETF inflows continue to support buying (April 14, US Bitcoin ETFs entered 3,353 BTC, Ethereum ETFs entered 29,225 ETH).
· Negative side: IRS tax pressure to be released on April 15, delayed expectations for rate cuts until 2027, the dollar index remaining high pressures crypto assets, and the risk of negotiations failing again after the ceasefire ends on April 22.
Conclusion: The current market assessment is between “relaxation of old narratives” and “seeds of new narratives.” This “lack of material” phase is usually accompanied by high volatility. For investors, rather than betting on a single direction, it’s better to use a grid strategy of “buy low, sell high” within a broad range of $68,000–$75,000, waiting for further macro clarity.