As a seasoned researcher with years of experience navigating through market corrections, I find the current crypto market downturn quite familiar. The 13% drop from last week’s peak is reminiscent of previous cycles, where the market tends to overreact to economic news and then correct itself.
Crypto markets are in correction mode, dropping around 13% from their peak last week.
Although it’s the holiday season, several economic reports are scheduled for release this week. Nevertheless, these reports may not significantly affect the crypto markets.
According to the Kobeissi Letter, there’s a likelihood that the market turbulence experienced last week will continue into the beginning of this one.
Economic Events Dec. 23 to 27
The majority of the losses experienced during the previous week can be attributed to the market’s response following the Federal Reserve’s decision to lower interest rates by 0.25% at their meeting on Wednesday.
Instead, the “Dot Plot” from the central bank suggests that policymakers anticipate just two potential interest rate reductions in the upcoming year, rather than the four they previously forecasted in September.
Moreover, Chair Jerome Powell of the Federal Reserve projected a higher rate of core inflation for 2025 compared to earlier predictions. He also emphasized that the central bank will exercise caution when it comes to additional interest rate reductions.
On Monday, we’ll get the latest report on the Consumer Confidence Index for December, a measurement that indicates consumer confidence in economic activity, affecting their spending habits, as it accounts for around 70% of the nation’s Gross Domestic Product (GDP).
Additionally pertinent to expenditure, the Durable Goods Orders Report scheduled for release on Tuesday will provide insight. This data quantifies orders received by manufacturers for long-lasting products like vehicles and home appliances. By analyzing this report, we can gauge US manufacturing activity and understand the demand for high-priced goods. These trends are connected to consumer trust and economic outlook as well.
Key Events This Week:
1. CB Consumer Confidence data – Monday
2. Durable Goods Orders data – Tuesday
3. November New Home Sales data – Tuesday
4. Markets Closed, Merry Christmas! – Wednesday
5. Initial Jobless Claims data – Thursday
6. Atlanta Fed GDPNow data – Thursday…
— The Kobeissi Letter (@KobeissiLetter) December 22, 2024
On Thursday, following the holiday on Wednesday, we’ll get the latest initial jobless claims figures. Additionally, the GDP data from the Atlanta Fed is scheduled for release on December 26th.
Crypto Market Outlook
Over the weekend, the value of cryptocurrency markets kept dropping, reaching a total market cap of about $3.4 trillion by Monday morning. Approximately $200 billion in value was withdrawn from the crypto sector over Saturday and Sunday.
The adjustment erased all progress made during the last month, causing markets to revert to where they were toward the end of November.
During the Asian trading session on Monday morning, Bitcoin experienced a decline of approximately 3%, causing its value to drop below $94,000. This move comes after it had earlier hit an all-time high of $108,000 on Dec. 17. Currently, Bitcoin is trending downwards and approaching the support level around the lower $90,000 range.
The value of Ethereum has experienced a significant drop, falling approximately 20% since it peaked at more than $4,000 last week, reaching as low as $3,200 during late-night trades on Sunday.
The altcoins were all in the red as the new week began with average losses between 2% and 4%.
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2024-12-23 10:54