QCP Capital, a cryptocurrency trading firm based in Singapore, recently shared a market analysis. They've noted that global markets have adjusted to new expectations about Federal Reserve interest rate cuts. The 10-year Treasury yield has climbed to 4.8%. This is the highest level we've seen since late 2023. Markets now expect no rate cuts until October.
At the market opening, equity futures dropped by 1.5%. This briefly pushed Bitcoin below $90,000. However, it quickly bounced back, trading above $95,000.
Looking ahead, the upcoming Producer Price Index (PPI) and Consumer Price Index (CPI) data are expected to be crucial. QCP Capital suggests that surprises may lean toward the upside. As markets adjust to a longer period of high interest rates, some analysts are even considering the possibility of a rate hike. This reflects the complex dynamics of the current financial landscape.
The rising yields could challenge the stability of financial markets, including the cryptocurrency sector. There's a cautious tone in Bitcoin options activity. Protective puts are being adjusted below the critical support level of $90,000. Additionally, short-term implied volatilities and skew spreads remain elevated. The VIX, a key measure of market volatility, currently stands at 18.68. This suggests that significant market fluctuations may continue throughout January.
Despite these challenges, there's a sense of optimism about a potential market catalyst. Reports indicate that former U.S. President Trump might sign executive orders upon taking office. These could address issues like "de-banking" and possibly repeal controversial crypto legislation.
As for Bitcoin, it is currently trading at $96,500, reflecting a 6.27% increase over the past 24 hours. During this time, Bitcoin's price fluctuated between a low of $89,941 and a high of $97,246.
According to data from SoSoValue, spot Bitcoin exchange-traded funds (ETFs) saw outflows on Monday totaling $284 million. The Grayscale Bitcoin Trust (GBTC) recorded a single-day net outflow of $89.01 million. This brings its cumulative historical net outflow to $21.66 billion. In contrast, the Grayscale Bitcoin Mini Trust ETF reported no net outflows for the day, with its total historical net inflow currently at $924 million. The BlackRock Bitcoin ETF (IBIT) led single-day net inflows, receiving $29.46 million yesterday. This raises its cumulative net inflow to $37.70 billion.
The global cryptocurrency market capitalization has now reached $3.33 trillion. This represents a 6.15% increase over the past day. Trading volume has also surged, climbing 48.06% to reach $161 billion, according to CoinMarketCap.