The price of Bitcoin has climbed back above $90,000, while altcoins continue their upward trajectory with gains exceeding 5%. As the U.S. markets remain closed due to Thanksgiving, yesterday’s positive closure reinforces optimism. What do the current conditions indicate? What is the status of global markets?
Global Markets
Increasing optimism about the Federal Reserve’s expedited rate cuts is bolstering risk markets. The rebound in stocks persisted in the U.S. yesterday, allowing the cryptocurrency market to enter the holiday period robustly. Despite concerns about a potential attack on Venezuela, unless a significant negative event occurs, the prevailing bullish sentiment in cryptocurrencies is likely to persist at least until the Monday opening.
Gold remains stagnant, while the dollar paused after a two-day drop. The rapid shift in interest rate expectations is encouraging. At least three rate cuts are anticipated by the end of next year. Last week, the outlook for interest rates was significantly different. Calming concerns around tech stocks and a reduced likelihood of the Fed resisting cuts are positive developments.
Japanese and South Korean tech stocks continue their rise. As the probability of the Ukrainian war ending increases, investors are focusing on its next phase. The end of the war is key for the decrease in oil prices, as JPMorgan projects a $30 price target by 2027, citing supply surplus as the rationale.
U.S. Investors and Cryptocurrencies
In October, there were concerns about a prolonged downturn, which were not unfounded. U.S. investors had lost their appetite for risk for an extended period, and the movement that began in October continued into November. At that time, the decline of the Binance Premium also contributed to the global spread of risk appetite deficiency.
But today, things are changing. As you can see in the above graph, U.S. risk appetite, which has been negative for almost a month, is improving. The nearing end of the negativity in Coinbase Premium fuels expectations that the downturn in the broader cryptocurrency market is nearing an end. Today, analyst comments reflect this sentiment:
We are very close to the Coinbase Premium index turning positive; it’s been negative for 28 days. It’s still negative but is slowly trying to move out of the negative zone. If it fully turns positive and shifts momentum upwards, it will be better, though it hasn’t turned yet. We’ve had times in the past when it came close, but a news pressure turned the momentum downward again. Hopefully, nothing will arise to create negative pressure on the U.S. side, and the premium will recover. Seeing a positive movement is needed for lasting price actions.
The U.S. holiday reduces the risk of negative news, creating favorable conditions for momentum to increase for cryptocurrencies on Coinbase until Monday.