Good morning, Asia. Here’s what’s making news in the market:
Welcome to Asia Morning Briefing. We provide a daily summary of the main news from the U.S. time, along with a look at market trends and analyses. For more insights on the U.S. market, see below.
Bitcoin is currently around $90,000 after experiencing sharp, albeit brief, price swings over the weekend, highlighting the thin liquidity expected as the year wraps up.
A recent memo from QCP indicates that open interest for both Bitcoin and Ethereum has nearly halved since October. This points to a significantly reduced capacity for the market to handle directional trades.
In addition, Polymarket odds suggest that short traders are already anticipating a 25 basis point rate cut this week, showing a preference for a pause in January. This indicates investors are leaning towards a more measured easing path rather than a cyclical one.
This situation helps explain why Bitcoin remains within a narrow range due to minimal market activity. Notably, substantial price shifts are now more likely to stem from unexpected guidance rather than the interest rate changes themselves.
“Although the Fed’s potential rate cut might grab headlines, the real shift lies in the increasing differences in policy signals from major central banks. The Bank of England is split, the European Central Bank stands firm, and the Bank of Japan is set to tighten yields to levels not seen since 2007. This backdrop comes amid rising tensions in several Asian economies,” Gracie Lin, CEO of OKX Singapore, shared in a discussion with CoinDesk.
Lin also mentioned that recent de-leveraging has cleared out crowded trades and improved market structure, providing prices the flexibility to move without forced transactions. This reset has allowed Bitcoin to reclaim some ground, edging closer to $91,000 as global capital responds to mixed macro signals.
Ultimately, market direction will hinge on how traders interpret the Fed’s guidance and the evolving policy landscape, rather than solely on the interest rate adjustments that have been largely anticipated.
Market movements:
Bitcoin: Bitcoin dipped towards $90,000 during early U.S. trading on Monday, following a brief recovery over the weekend. The market continues to stay within a limited range, impacted by rising bond yields and declining stocks affecting risk assets.
Ethereum: Ether experienced a slight drop relative to the broader market but still managed to perform better overall, occasionally reaching its highest point against Bitcoin in over a month.
Gold: Gold prices edged down on Monday as traders remained wary ahead of the Fed’s policy meeting. The markets are anticipating a strong likelihood of a rate cut and are looking for insights from Chairman Powell about future actions.
Nikkei 225: Stocks across Asia-Pacific fell on Tuesday, following declines in Wall Street as investors stayed cautious ahead of the Federal Reserve’s anticipated rate cut and awaited updates on the central bank’s future plans.
Elsewhere in cryptocurrencies:
- Forty percent of Canadian cryptocurrency users indicate potential tax evasion risks, according to tax authorities (CoinDesk).
- Ondo Finance has announced the closure of a SEC investigation from the Biden administration without any charges being filed.
