Crypto Market

This week is packed with crucial macroeconomic data, including key reports on the labor market and inflation, which could significantly impact the direction of the crypto market.

The Crypto Fear & Greed Index is showing ’extreme fear’ with a score of 16, a sentiment that has dominated the market for over two months. This contrasts with the U.S. stock market, which, while also fearful, remains near its all-time high, unlike Bitcoin which is down nearly 30% from its peak.

Santiment analysis identifies XRP as the sole undervalued top-10 cryptocurrency, with an MVRV ratio of -6.1%, while Bitcoin and Ethereum remain neutral or overvalued. Despite quiet market conditions and stable derivatives data, Ripple’s developments, like its RLUSD stablecoin growth, could act as catalysts for XRP’s price movement.

The U.S. Federal Reserve cut interest rates, but mixed signals and a cautious outlook have left the crypto market uncertain, with Bitcoin and the total market cap declining.

The Federal Reserve’s upcoming interest rate decision is expected to be a 0.25% cut, which could positively impact the crypto market by making borrowing cheaper and saving less attractive.

The crypto market shows a cautious recovery with Bitcoin and Ethereum in the green. Key developments from the US and institutional players, including Fed bond purchases and Ethereum’s new use cases, boost optimism.

The Bank of Japan is preparing to raise rates to 0.75%, the highest since 1995, ending decades of ultra-loose policy. This could impact risk assets like crypto by reducing the yen carry trade, which has been a source of cheap funding.

ING Bank reports that US government bond yields are around 4-4.1% and may rise, which could negatively impact the crypto market.

The crypto market saw a major downturn on December 1, with Bitcoin plunging over 5% and erasing $160 billion in total market cap. The drop is attributed to macroeconomic uncertainty ahead of a Fed speech, tightening monetary signals from Japan, and renewed regulatory pressure from China.

Bitcoin plunged 7% overnight, wiping out last week’s gains, as news from Japan triggered massive liquidations. The market now awaits a key speech by Fed Chair Jerome Powell.