The crypto markets are currently in correction mode, with a drop of approximately 13% from their peak last week. Despite it being a holiday period, there are a few economic reports expected to come out this week, though they are unlikely to have a significant impact on the crypto markets. The Kobeissi Letter anticipates volatility from last week carrying over into early this week.
Last week’s losses in the crypto markets were largely due to the reaction to the Federal Reserve’s decision to reduce rates by 0.25%. However, the central bank’s “Dot Plot” revealed that policymakers are now expecting only two interest rate cuts next year, as opposed to the previously predicted four. Fed chair Jerome Powell also mentioned higher core inflation in 2025 and stated that the central bank will be cautious about further cuts.
On Monday, the Consumer Confidence Index report for December will be released, giving insight into consumer confidence in economic activity and impacting consumer spending, which contributes around 70% to GDP. Additionally, November’s Durable Goods Orders report, which measures the cost of orders received by manufacturers for durable goods, will be released on Tuesday. This report helps assess US production activity and reflects the demand for big-ticket goods, which is related to consumer confidence and economic sentiment.
Key economic events this week include CB Consumer Confidence data on Monday, Durable Goods Orders data and November New Home Sales data on Tuesday, and Initial Jobless Claims data and Atlanta Fed GDPNow data on Thursday. Markets will be closed on Wednesday for Christmas. Initial jobless claims data will be released on Thursday, along with GDP data from the Atlanta Fed on December 26.
The crypto market outlook remains bearish, with total capitalization falling to $3.4 trillion on Monday morning as around $200 billion left the space over the weekend. This correction has erased all gains from the past month, bringing markets back to late November levels. Bitcoin has retreated 13% from its all-time high of $108,000 on December 17, with a daily loss of 3% on Monday, dropping below $94,000. Ethereum has plummeted even further, losing 20% from its high of over $4,000 last week to fall below $3,200 in late Sunday trading. Altcoins also saw losses between 2% and 4% as the new week began.
In conclusion, the crypto markets are currently experiencing a correction after reaching peak levels last week. Economic reports scheduled for this week are unlikely to have a significant impact on the markets, which are still reeling from the Federal Reserve’s decision to reduce rates. Bitcoin and Ethereum have both seen significant losses, with altcoins following suit. Investors will be watching closely for further developments in the market and any potential signals of a turnaround in the near future.
