What to know:
On Thursdays, the digital currency ADA from Cardano experienced losses among the major cryptocurrencies, as the weakness of Bitcoin continued unabated, thereby hindering any potential surge in alternative coins.
On Wednesday, Bitcoin (BTC) dipped to around $93,000 due to a surge in U.S. treasury yields following the release of robust economic data. This strong data caused equities to decline. In particular, the Institute for Supply Management (ISM) report on U.S. service providers exceeded expectations, with the prices-paid index reaching its peak since the beginning of 2023.
Other major cryptocurrencies have been experiencing a decline, with their prices dipping by almost 10% since Monday. Prices for tokens like ADA, Solana’s SOL, BNB Chain (BNB), and ether (ETH) have remained relatively stagnant over the past week as traders cashed out following an initial surge earlier in the week.
In the last day, the wider CoinDesk 20 (CD20) – which follows the biggest digital tokens – has dropped by 2.87%. This comes on top of a 7% drop seen on Wednesday.
Currently, the potential risks associated with investments in the diverse S&P 500 index appear to be higher compared to a year ago. This increased perceived risk could potentially discourage growth in riskier assets like Bitcoin, as investors might opt for safer choices such as bonds instead.
The cautious approach being taken with stocks may be due to the possibility that President-elect Donald Trump’s inauguration on January 20 could lead to a “sell-the-news” scenario, as suggested by Omkar Godbole from CoinDesk. With risky investments increasing in various financial markets over the past two months due to expectations of corporate and economic reforms under President Trump, it’s important to consider that some may choose to cash in their profits.
It’s generally anticipated that Trump’s inauguration on January 20th could bring changes in crypto regulations and possibly establish a strategic Bitcoin reserve, potentially fueling the next cryptocurrency market rally over the following months.
As a researcher, I find myself aligning with the perspective of QCP Capital, based in Singapore. They advise us to closely monitor the upcoming U.S. economic data releases this coming Friday, as these could significantly influence our subsequent trading decisions.
The upcoming FOMC and NFP releases this week are attracting much attention, as they may continue shaping Bitcoin’s price trend. QCP stated in their Telegram market broadcast on Thursday that they see Bitcoin’s recent dip as a brief pause, paving the way for an uptrend, fueled by optimism surrounding Trump’s inauguration.
The Non-Farm Payroll (NFP) is a monthly report that offers insights into the creation or reduction of jobs within the U.S., excluding farmwork, serving as an indicator of the nation’s economic condition. Positive NFP data implies a thriving economy, potentially leading to increased interest rates, which historically have a negative impact on risky assets like bitcoin. On the other hand, weak NFP results indicate that interest rates may remain low or even decrease, which is generally favorable for risky assets.
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2025-01-09 14:49