Cryptocurrency Market December 1st CHK: BTC and ETH pass key milestones as the Fed gives a positive interest rate signal

Bitcoin has officially surpassed $17,000 and Ethereum is nearing $1,300 with positive momentum.

Cryptocurrency Market

Market data shows that Bitcoin has continued its upward momentum since yesterday and has surpassed $17,000. As of now, BTC is trading around $17,150, with a stable trading volume of $26.5 billion.

Bitcoin’s $17,249 peak has appeared on Binance, but has yet to turn into support. “BTC bulls want to hold on to $16,800 as S/R first trend reversal. Going back below this area should give a small push,” summarized popular analyst Cheds, revealing a short position at higher levels.

The market was volatile as Bitcoin successfully closed monthly above $17,000. Analyst Credible Crypto commented on his personal Twitter: “Bitcoin is looking for a close above $17,500 (June low) for the best results.”

In analyzing the outlook for December, trading firm QCP Capital has outlined several important milestones to keep in mind for investors. Includes US Consumer Price Index (CPI) data for December 13. The next day (February 14), the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) will outline inflation policy and expectations.

“While there will probably be no more major market shocks, the continued deflation of the crypto space will continue into the coming year, as many people are forced to continuously sell assets to secure their assets. liquidity guarantee.

This will likely only end at the end of Q2-Q3 of the year when the economy really takes a hit from the 4.75% interest rate, forcing the Fed to then pivot, freeing up much-needed liquidity. And then investors can find their way into the crypto market again.”

QCP added that another potential catalyst for BTC price volatility will come from Mt.Gox’s return of capital to creditors, expected in January.

With Bitcoin closing monthly above $17,000, the altcoin market is also showing signs of a slight upswing. Ethereum (ETH) is on its way back to $1,300 and is currently trading around $1,290 on 24-hour volume reaching a value of $8 billion.

Leading the way is GMX with a gain of nearly 13%, as the token’s trading volume suddenly increased by nearly 100% in the past 24 hours, surpassing $35 million.

Some other projects showing slight gains of 3-6% include Quant (QNT), Polygon (MATIC), Fantom (FTM), ZCash (ZEC), ImutableX (IMX), NEAR Protocol (NEAR), UNUS SED LEO (LEO)…

Market sentiment continued to maintain steady state since yesterday. The Greed and Fear Index (FGI) is still in the Fear zone at 27 points.

Macro factors

The US stock market rallied strongly in trading on Wednesday (November 30), after US Federal Reserve Chairman Jerome Powell confirmed the central bank is prepared to slow down its bull campaign. interest rate. Crude oil prices rose 3% on signs of tightening supply.

At the close, the Dow Jones Industrial Average rose 737.24 points, or nearly 2.2%, to reach 34,589.77 points. The Nasdaq index rose 4.41% to 11,468 points. The S&P 500 Index rose 3.09% to 4,080.11 points.

“A reduction in the pace of rate hikes is appropriate as we approach a level of tightening that could be enough to drag inflation down. The time for a rate cut is as early as possible at the December meeting,” Powell said in a much-anticipated speech at the Brookings Institution in Washington DC.

However, the leader of the world’s most powerful central bank also warned that the Fed could maintain policy tightening for a while before the end of the fight against inflation. “Despite some promising developments, we still have a long way to go to restore price stability,” he said.

These comments by Mr. Powell reinforce the optimism of some investors that the Fed will introduce a shorter rate jump, namely 0.5 percentage points, at its meeting on December 4, after 4 consecutive interest rate hikes with a “super-terrible” jump of 0.75 percentage points.

“Investors are looking for a rock, something they can rely on for a more certain forecast of what the Fed will do with interest rates going forward. The message that rate hikes could slow as early as December is that rock,” AXS Investments CEO Greg Bassuk told CNBC.

The strong rally on the last trading day of the month underpins the gains for US stocks in November. The Dow Jones and S&P 500 closed with gains of 5.7% and 5.4%, respectively, while Nasdaq nearly 4.4% increase. Expectations of a deceleration in the Fed’s rate hike campaign were the driving force behind this result.

In the energy market, the price of Brent crude oil futures in London increased by 2.4 USD/barrel, or 2.8%, to settle at 85.43 USD/barrel. WTI oil futures in New York rose $2.35/barrel, or 3%, to settle at $80.55/barrel.

Signs of tightening supply, a weak dollar, and optimism about the recovery of China’s oil demand are the driving forces behind the “black gold” price increase this session.

The weekly report from the US Energy Information Administration (EIA) showed that US crude inventories fell by 13 million barrels in the week ended November 25, the steepest weekly decline since 2019.

Speaking to Reuters news agency on Tuesday, Fatih Birol, Director General of the International Energy Agency (IEA) said that the institution forecasts that by the end of the first quarter of 2023, Russia’s crude oil production will could decrease by about 2 million barrels per day due to the impact of sanctions including the embargo of the European Union (EU) and the price ceiling of the Group of 7 industrialized countries (G7). For its part, the Russian Foreign Ministry announced that it will not sell oil to countries that impose a price ceiling on Russian oil.

In terms of demand, oil prices were supported by optimism about a recovery in oil demand in China, the world’s largest crude oil importer.

China on November 30 reported a decrease in the number of new Covid-19 infections compared to the previous day. The market also speculated that the country was about to relax some travel restrictions. In Guangzhou, some districts began easing restrictions on November 30.

In addition, oil prices were also supported by the decline of the dollar after the signal of slowing interest rate hike from Mr. Powell.

However, the extent of oil price support was limited somewhat as the EIA report showed US heating oil demand fell for the second consecutive week despite the onset of winter. On the other hand, US crude oil production in September increased 2.4% to 12.27 million bpd, the highest level since Covid-19 became a global pandemic.

Not to mention, a source familiar with the matter told Reuters news agency that OPEC +’s decision to hold the December 4 output meeting in an online format shows that it is unlikely that the group will make any changes to the oil market. oil production.

OPEC+ is an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and its non-OPEC ally, Russia. Ahead of the OPEC+ meeting, there has been recent speculation that the group will cut production to cut the price of oil, and there are also some analysts that OPEC+ will increase production to compensate for the loss of oil. the possibility of a decrease in Russian oil production.

In November, the price of Brent oil fell by nearly 10%, while the price of WTI fell about 8.8%. The main reason for the drop in oil prices is the concern about energy demand in the context of the global economy facing the risk of recession because of tight monetary policy.

Closing the trading session on November 30 at the New York market, spot gold price increased by 18.9 USD/oz, equivalent to 1.1% increase, closing at 1,769.7 USD/oz. At more than 9 am this morning in Vietnam time, spot gold price increased by 4.7 USD/oz compared to the US closing price, standing at 1,774.4 USD/oz.