Bitcoin holders may be facing challenges as inflation eases, testing long-term conviction, says Anthony Pompliano. Scarcity thesis hinges on money supply expansion over short-term CPI moves. Market sentiment weak, with uncertainty looming before potential recovery. Inflation data shows cooling, but real-world costs may not reflect improvement.

Pompliano questions if investors can hold Bitcoin without high inflation. With prices down 28% in a month, fear in the market is at an “Extreme Fear” level. Anticipated deflation could lead to policy responses like rate cuts and liquidity injections. Dynamic described as a “monetary slingshot” weakening the U.S. dollar.

Revised US employment data shifted economic expectations, unsettling markets. Investors more concerned with data reliability than weak headline figures. Derivatives activity increases as large traders hedge against further downside. Bond market signals tighten liquidity, making asset recovery difficult. Market shows hesitation, with uncertainty prevailing.

Read more at Yahoo Finance: Pompliano Says Cooling Inflation Tests Bitcoin Investors’ Conviction