After a phased sell-off, the cryptocurrency market may enter a key window for stabilization and rebound in the short term. Although the Federal Reserve implemented a rate cut last week, market sentiment remains cautious, with traders closely monitoring various macroeconomic data and central bank policy signals, including US CPI inflation data, initial jobless claims, and the Bank of Japan’s interest rate decision.
On Monday morning, the total cryptocurrency market capitalization slightly declined to approximately $3.13 trillion, a daily drop of about 1.5%. However, overall trading activity did not significantly decrease, with 24-hour total trading volume remaining at around $90.9 billion, indicating that funds have not been withdrawn from the market on a large scale. Bitcoin price hovers around $89,000, down about 1% intraday, while Ethereum shows relative resilience, with a decline of less than 1%. The market structure exhibits characteristics of “converging declines and stable trading volume.”
In terms of sentiment indicators, the crypto market’s fear and greed index dropped to 16, entering the “extreme fear” zone, reflecting that short-term risk appetite remains subdued. However, this level is better than the extreme emotional stage last month.
Analysts believe that macroeconomic data this week will be a crucial variable for directional decisions. US CPI inflation data will directly influence the market’s judgment on the future interest rate path. Previously, CPI figures below expectations triggered a short-term rally in Bitcoin; if inflation continues to cool, risk assets may gain further support. Additionally, the number of initial unemployment claims in the US remains a focus; if the labor market weakens further, it could reinforce expectations of looser monetary policy.
Furthermore, the Bank of Japan’s interest rate decision has become another source of uncertainty for global markets. Recent improvements in Japanese manufacturing confidence have sparked speculation about interest rate hikes. Historical data shows that during Japan’s rate hike cycles, Bitcoin has experienced significant corrections, which makes some traders cautious.
Regarding seasonal factors, market participants are also beginning to pay attention to the “Christmas rally.” Historically, liquidity tends to improve toward the end of the year, benefiting risk assets. If macroeconomic data align, the crypto market could see a phase of recovery.
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