Crypto Daybook Americas will be taking a break starting Wednesday, with plans to return on January 5. The newsletter will resume with its usual updates on industry happenings from the previous night and forecasts for the day ahead. The team extends warm wishes for a joyful holiday season to all.
Market Sentiment Remains Cautious
The sentiment in the cryptocurrency market remains notably subdued as anticipation builds for the U.S. GDP data report set to be released later today. This report is projected to indicate that the U.S. economy remained robust during the third quarter. Bitcoin, the leading cryptocurrency by market capitalization, experienced a decline to $87,500 after struggling to maintain its standing above the $90,000 mark earlier in the week. All 16 CoinDesk indexes have recorded losses over the past 24 hours, with the DeFi Select index dropping by 4% and the metaverse index decreasing by over 3%. The only exceptions among the top 100 tokens by market cap are HASH and RAIN, both of which have seen gains exceeding 6% within the same time frame.
Unusual Market Trends Amid Falling Dollar
The current weak market sentiment is surprising, especially considering the ongoing decline of the dollar index, which typically benefits risk assets like cryptocurrencies. The DXY has fallen below 98.00 and is approaching its lowest level since early October. Alex Kuptsikevich, chief market analyst at FxPro, pointed out in an email that this situation is occurring alongside a significant rally in gold and other precious metals, as well as a weakening dollar. This shift reflects a changing attitude towards risk, which is further evidenced by a sell-off in global bonds. Kuptsikevich predicts that in the weeks ahead, cryptocurrencies may see a more pronounced decline, with risk aversion potentially extending to equities and currencies from emerging markets.
Anticipation of U.S. Economic Data
At 8:30 a.m. today, the U.S. Bureau of Economic Analysis will release its preliminary estimate for the third-quarter GDP. Most analysts are predicting an annualized growth rate of 3.2% for the quarter, with some forecasts reaching as high as 3.5%. While these figures suggest a slowdown from the second quarter’s growth of 3.8%, they still significantly surpass the 2.6% average seen since late 2021. A weaker-than-expected GDP report could rekindle interest in Bitcoin, although it remains to be seen if this will be sufficient to push prices sustainably above the $90,000 threshold, which has recently acted as a resistance level.
Traditional Markets Show Little Movement
In the realm of traditional markets, futures contracts linked to the S&P 500 and Nasdaq are showing minimal changes, reflecting a lack of clear direction as the market prepares to open. Historically, these indexes perform well during the final trading days of the year. Meanwhile, gold continues its rally, nearing $4,500 per ounce, and the Japanese yen has appreciated against the dollar amid speculation that the Bank of Japan might intervene in foreign exchange markets to counter the currency’s recent depreciation.
Key Upcoming Economic Events
For a detailed overview of events scheduled for the week, readers can refer to CoinDesk’s "Crypto Week Ahead." Notable economic indicators to watch include:
- Dec. 23, 8:30 a.m.: U.S. October Durable Goods Orders Month-over-Month Estimate at -1.5%; Excluding Transport Month-over-Month Estimate at 0.3%; Excluding Defense Month-over-Month (Previous at 0.1%).
- Dec. 23, 8:30 a.m.: U.S. Q3 PCE Prices Quarter-over-Quarter (Second Estimate), with Headline Estimate at 2.9% and Core Estimate at 2.9%.
- Dec. 23, 8:30 a.m.: U.S. Q3 GDP (Initial Estimate) (Previous at 3.8%).
- Dec. 23, 10 a.m.: December CB Consumer Confidence Estimate at 92.
Governance Votes and Decisions
Yearn DAO is currently voting on two proposals: to rotate multisig signers (YIP-89) and to implement a recovery plan for yETH (YIP-90), which aims to use Treasury yield along with a 10% revenue redirect and forfeited claims to repay users. The voting period concludes on December 23. Similarly, GMX DAO is voting to allocate $400,000 USDC for the new GMX-Solana deployment, with half of the funds intended for purchasing GMX tokens to establish an initial liquidity pool. This vote also ends on December 23. In another governance move, Aave DAO is voting to regain full ownership of brand assets from service providers like Aave Labs, ensuring they are controlled by the DAO to prevent any private misuse. This voting period will close on December 26.
Market Movements and Statistics
As of the latest updates, Bitcoin has experienced a decrease of 0.44%, settling at $87,638.35, marking a 24-hour decline of 2.41%. Ethereum is down 0.2% at $2,967.13, with a 24-hour loss of 2.47%. The CoinDesk 20 index has dropped by 0.3%, currently at 2,717.75, reflecting a 24-hour decline of 2.16%. Additionally, the Ether CESR Composite Staking Rate has increased by 4 basis points to 2.84%. The Bitcoin funding rate on Binance stands at 0.0046%, which annualizes to approximately 5.03%. The dollar index (DXY) is down 0.39%, currently at 97.90, while gold futures have risen by 1.04% to $4,516.00.
Technical Analysis of Market Trends
The daily candlestick chart for Solana (SOL) reveals recent price fluctuations, showing that the token’s price has broken below a prolonged period of sideways consolidation. However, it rebounded the following day, indicating potential seller exhaustion—a phenomenon often referred to as "Wyckoff spring action." This pattern could signal the beginning of a bullish trend reversal, but confirmation will depend on a break above the upper boundary of the current channel formation.
Performance of Crypto Equities
In the latest trading session, several crypto-related equities showed varied performances:
- Coinbase Global (COIN): Closed at $247.9, up 1.13%, but down 0.57% in pre-market to $246.49.
- Circle Internet (CRCL): Closed at $87, up 1.01%, now down 1.44% at $85.74.
- Galaxy Digital (GLXY): Closed at $24.61, up 2.54%, now down 0.49% at $24.49.
- MARA Holdings (MARA): Closed at $10.13, down 0.49%, now down 0.79% at $10.05.
- Riot Platforms (RIOT): Closed at $14.4, down 0.69%, now down 0.14% at $14.38.
Overview of Financial Flows in ETFs
In the realm of exchange-traded funds (ETFs), daily net flows for spot Bitcoin ETFs recorded a decline of $142.2 million, bringing cumulative net flows to $57.25 billion with total BTC holdings nearing 1.31 million. For spot Ethereum ETFs, daily net flows were positive at $84.6 million, leading to cumulative net flows of $12.55 billion, with total ETH holdings around 6.09 million.
