Cryptocurrencies, led by Bitcoin, have maintained their pace of growth over the first week of December, making the most of the weakening US Dollar and a shining Euro. While stocks are falling, and the time for the ‘Santa Rally’ is coming closer, there are a lot of expectations and doubts among traders.
Last month, it was shaky for the crypto market as we saw the FTX scandal sending tremors down the market, and it took work to predict when the coins would rise again. The global crypto market cap fell to $730 billion. In fact, Bitcoin (BTC), Ethereum (ETH), and most altcoins fell to their multi-month lows. Except for the stellar rise of Litecoin, there wasn’t much action in the crypto market.
But this month, there have been many events that might do well to re-instigate the interest of employers. The first is that the coins have started moving up after a short setback. Second is that, it is likely that the ‘Santa Rally’ which is observed in traditional markets in the week leading up to Christmas, could show positive results for cryptocurrencies as well. Last year, during the same time, Bitcoin rose above $50k again, marking it as a time of notable gain. In the Stock Market, the causes of a Santa Claus rally could be general optimism, holiday bonuses, and tax considerations. While cryptocurrencies have a very independent story of their own, the seasonal happiness also affects the crypto traders’ sentiment.
On the macro front, the focus cannot be shifted to one region as there is drama in all markets. The protests against strict COVID-19 policies in Mainland China is the region’s biggest wave of civil disobedience since the 1989 Tiananmen protests. Its impact on China’s economy and all other markets is going to be important in the performance of cryptocurrencies as well.
However, it is possible that, as usual, the crypto market responds more dramatically to the US Stocks market than any other. Notably, Bitcoin responded positively to The US Fed Reserve Chairman James Powell when he said that the Federal Open Market Committee might just increase interest rates by 50 bps and not 75. Powell noted encouraging signs that inflation was slowing down. More to look forward to is the 2022 Central Banks Meeting, where the Federal Reserve, European Central Bank, and Bank of England will discuss monetary matters in the coming weeks.
Bitcoin and Ether
Bitcoin has recorded peaks over the first week of December, after James Powell’s reassuring indications. At the time of writing, the price remains north of $17k at $17,006.44. Bitcoin has been holding its position above the $17k level, also bringing positive sentiments from across the industry about 2023’s price performance.
Ether, the other key currency at hand, has also recorded more than 7% growth over the past 7 days. Ether was able to break above the $1,300 mark. Currently, on the 5th of December, Ether’s price has slipped to $1,259.94 from $1,301.
All major coins, including Bitcoin, Ether, DOGE, LTC, ADA, USDT, and USDC, are rallying, while XRP, TRX, and XLM are in the red with a slight drop.
Please note that this is not trading advice. We recommend you to carry out your own research before making any trading decisions. This article is for informational purposes only.