Cryptocurrency Market Sees Gains Amid Hopes for Fed Rate Cuts
Major cryptocurrencies experienced an increase alongside stock markets on Monday, as traders grew more optimistic about a potential interest rate cut by the Federal Reserve in December.
Crypto Gains Overview
| Cryptocurrency | Gain +/- | Price (recorded at 8:25 p.m. ET) |
|---|---|---|
| Bitcoin (BTC) | +1.54% | $87,998.49 |
| Ethereum (ETH) | +5.60% | $2,941.69 |
| XRP (XRP) | +10.28% | $2.25 |
| Solana (SOL) | +5.94% | $138.51 |
| Dogecoin (Doge) | +4.98% | $0.1519 |
Bitcoin showed some momentum, reaching just above $89,000 before settling back into the low $88,000 range. Interestingly, its trading volume shot up by 19% over the last 24 hours.
Ethereum also saw a notable rebound but faced some resistance near the $3,000 mark, with trading volume rising nearly 50% lately.
Meanwhile, shares of companies focused on Bitcoin, like Strategy Co., Ltd. (NASDAQ:MSTR), saw gains of over 5% during regular trading hours.
In the past day, cryptocurrency liquidations amounted to $365 million. This has unfortunately meant a loss of about $255 million for those holding short positions, as reported by Coinglass.
Bitcoin’s open interest edged up by 0.55% recently. In a somewhat intriguing trend, nearly 70% of Binance traders with open BTC positions are leaning toward long positions.
Though the market sentiment is still dominated by “extreme fear,” it’s worth noting that there’s a glimmer of hope—perhaps an indication of a potential shift.
Top Gainers in the Last 24 Hours
| Cryptocurrency (Market cap > $100 million) | Gain +/- | Price (recorded at 8:25 p.m. ET) |
|---|---|---|
| Rain | +118.71% | $0.007934 |
| Fatcoin | +26.22% | $0.2806 |
| Helium (HNT) | +22.21% | $2.26 |
The overall cryptocurrency market capitalization rose by 2.56% in the past 24 hours, reaching $3.03 trillion.
Stocks Rise Following Dovish Fed Comments
The stock market kicked off the holiday-shortened week on a positive note. The Dow Jones Industrial Average increased by 202.86 points (0.44%) to close at 46,448.27. The S&P 500 rose by 1.55%, finishing at 6,705.12, while tech stocks drove the Nasdaq Composite up by a significant 2.69%, closing at 22,872.01.
These gains were largely fueled by trader optimism regarding a Federal Reserve interest rate cut next month, spurred by dovish remarks from central bank officials.
Governor Christopher Waller was the latest to express support for a rate cut in December, following similar sentiments from New York Fed President John Williams last week.
Traders are now pricing in an 80% likelihood of a 25 basis point interest rate cut, an increase from the previous day’s estimate of 71% according to the CME FedWatch tool.
Is Bitcoin Preparing for a Bullish Rebound?
CryptoQuant, a blockchain analysis firm, pointed out that Bitcoin’s open interest has seen its most significant 30-day drop in this cycle—last witnessed during the bear market of 2022.
They noted, “Historically, these cleansing stages have often been vital for establishing a solid bottom and paving the way for a new bullish trend.”
However, renowned cryptocurrency analyst Michael van de Poppe mentioned that even with signs of recovery, Bitcoin continues to trend downward, with $91,000 being a key resistance level.
“I expect some consolidation, perhaps testing the $85,000 to $86,000 range before we see higher moves,” he suggested.
