Tag Archives: rate

The Independence Day crypto puzzle: Up or down?

The Independence Day crypto puzzle: Up or down?

When you look at the digital asset market, it has climbed 2.47 per cent to reach a total capitalisation of US$2.13 trillion in 24 hours. You might mistake this sudden upward movement for a fundamental shift in blockchain utility. I want to say this again: this is a classic macroeconomic relief rally.

Weak United States employment figures reduced expectations for further Federal Reserve rate hikes. This shift prompted traders to rotate capital into risk assets. The current market dynamics reflect shifting interest-rate expectations rather than any intrinsic evolution in decentralised network technologies. We see speculative capital chasing yields in a traditional financial system struggling with persistent inflation and uncertain monetary policy.

The primary catalyst for this rotation stems directly from disappointing economic data from the United States. The government reported that June payrolls grew by a mere 57,000 jobs. This figure represents 50 per cent of the projected 113,000. Authorities also revised the prior months downward. This weak data, combined with dovish comments from Federal Reserve Chair Kevin Warsh about easing inflation risks, forced institutional traders to rapidly reprice their rate-hike expectations.

Consequently, capital flooded into digital assets and other alternative risk vehicles. This macroeconomic shift also explains the striking 86 per cent correlation we currently observe between Bitcoin and gold. Gold recently surged back above US$4,100. Investors clearly view both assets as inflation hedges against a weakening fiat system. The United States dollar subsequently slid against every major developed market currency. The dollar experienced a sharp bounce against the yen as global markets pared bets on near-term Federal Reserve rate hikes.

Traditional equity markets experienced severe fragmentation during this same period. This fragmentation highlights the broader risk rotation. Technology indices took a hit while defensive sectors absorbed fleeing capital. The Nasdaq 100 fell 1.6 per cent, and the Philadelphia Semiconductor Index tumbled 5.4 per cent. The Dow Jones Industrial Average bucked the negative trend and rose 1.1 per cent to claim a new record high.

The technology sector sell-off drove the SOXX index down 11.6 per cent over just two consecutive sessions. Major chipmakers led this decline. Applied Materials dropped 7.3 per cent. Micron fell 5.4 per cent. Intel sank 5.2 per cent. Investors clearly abandoned overvalued technology trades in favour of safety. Defensive sectors, including healthcare, consumer staples, utilities, and materials, all logged notable gains exceeding 2 per cent. This equity market behaviour perfectly mirrors the crypto relief rally. Both markets react identically to shifting Federal Reserve policy probabilities.

Treasury yields retreated following the employment miss. This retreat illustrates the repricing of interest rates. The two-year yield dropped four basis points to settle at 4.13 per cent. The 10-year finished slightly higher at 4.447 per cent. These bond market movements directly influence the daily liquidity available for speculative assets like cryptocurrency. When bond yields fall, the opportunity cost of holding yield-free assets decreases.

This decrease encourages capital to flow back into high-beta investments. This liquidity dynamic explains why the digital asset market reacted so violently to the jobs report. The combination of sliding treasury yields, a weakening dollar, and dovish central bank rhetoric creates a perfect storm for speculative digital assets. The underlying fundamental drivers stay constant during these macroeconomic shifts.

Within the digital asset ecosystem, capital rapidly flowed into high-beta sectors. This flow created a broad rally beyond the initial macroeconomic spark. The Ethereum ecosystem emerged as the top-performing narrative. It surged 16.7 per cent and contributed significantly to the overall market gains. Social sentiment platforms highlighted a generational opportunity for the asset. News outlets extensively covered its 2026 roadmap, focusing heavily on privacy and scaling upgrades. This intense buying pressure demonstrates how quickly liquidity rotates into existing layer-1 networks when macroeconomic conditions improve.

We must also acknowledge the deeply speculative nature of this liquidity injection. Tokens with minimal fundamental utility experienced explosive rallies from massive volume. These extreme price movements underscore the gambling nature of speculative financial activities. Participants actively chase outsized returns in deeply oversold altcoins.

The market faces immediate and critical resistance at the US$2.15 trillion pivot point. This level aligns with the 50 per cent Fibonacci retracement level. A daily close above this threshold could open the door to the US$2.18 trillion to US$2.21 trillion resistance range. Fragility defines the current relief rally.

A failure to hold the US$2.04 trillion to US$2.09 trillion support zone risks a swift retest of the yearly low at US$2.04 trillion. The most crucial near-term trigger for sustaining this upward momentum lies in the release of United States spot Bitcoin ETF flow data. Continued institutional outflows will undoubtedly cap any meaningful upside potential. We need to see these ETF flows turn positive to provide the continuous demand required to challenge higher resistance levels.

Global markets outside the United States present a similarly complex picture as investors digest the shifting macroeconomic landscape. Asian indices experienced mixed performance, featuring a distinct shift away from overvalued artificial intelligence-related trades. Regional investors now await further signals on United States rates and energy output from the upcoming OPEC meeting.

The Independence Day holiday closes United States markets. This closure reduces liquidity and exacerbates price volatility in both traditional and digital asset markets. This temporary reduction in daily trading volume means that current price levels might not reflect true market consensus. We must approach the week surrounding the holiday with extreme caution. Thin order books can lead to exaggerated price swings in either direction.

 

Source: https://e27.co/the-independence-day-crypto-puzzle-up-or-down-20260703/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto market cap drops to US$2.3T as Fed rate cut hopes fade after hot jobs report

Crypto market cap drops to US$2.3T as Fed rate cut hopes fade after hot jobs report

Cryptocurrency assets bore the brunt of a liquidity reassessment triggered by robust American employment data. While Japan’s Nikkei 225 surged past the historic 58,000 threshold amid domestic political momentum and the broader Asia Pacific index touched a record high, digital asset markets retreated two per cent to a US$2.3 trillion valuation.

This divergence underscores a fundamental reality I have observed throughout market cycles. When the Federal Reserve’s policy trajectory shifts, risk assets with the highest duration sensitivity are affected first and most severely. Cryptocurrencies continue to trade as premium risk instruments tethered to global liquidity conditions despite persistent narratives of independence.

The catalyst came from January’s US nonfarm payrolls report, which reported 130,000 new jobs, nearly double economists’ median forecast. This figure alone recalibrated market pricing for Federal Reserve action, pushing anticipated rate cuts from June into July 2026. Traditional equity markets reacted with restraint, with the S&P 500 and Nasdaq Composite closing nearly flat. Crypto markets exhibited a 68 per cent correlation with the Nasdaq 100 index and absorbed the shock with characteristic volatility. This statistical linkage confirms what seasoned observers recognise.

Digital assets function less as an inflation hedge and more as a leveraged bet on expansive monetary policy. When the prospect of cheaper capital recedes, speculative positioning unwinds rapidly. The two per cent decline in market cap represents not a fundamental rejection of blockchain technology but a mechanical repricing of future cash flows under tighter financial conditions.

Compounding this macro-driven pressure, derivatives markets amplified the downturn through forced liquidations. Bitcoin alone saw US$188 million in long-position liquidations in 24 hours, a 130 per cent surge that transformed a measured pullback into a sharp correction. These cascading liquidations reveal the fragility embedded in leveraged crypto trading ecosystems.

When price momentum reverses, algorithmic liquidation engines accelerate selling pressure beyond organic market depth, creating self-reinforcing downward spirals. This dynamic operates independently of underlying project fundamentals, punishing even robust protocols alongside speculative ventures. The phenomenon reflects a structural vulnerability in digital asset markets that persists despite a decade of maturation. Excessive leverage remains the accelerant that turns policy shifts into panic.

Sentiment metrics further illustrate the psychological dimension of this retreat. The market-wide fear and greed index plunged to eight, registering extreme fear across participant cohorts. Such readings typically emerge during capitulation phases when retail investors abandon positions after sustained losses. Historically, these moments often coincide with short-term bottoms and also signal prolonged recovery periods ahead. Extreme fear does not reverse instantaneously. It requires sustained positive catalysts to rebuild confidence.

Currently, no such catalyst exists on the immediate horizon. Investors face a rising probability of a US government shutdown to 84 per cent ahead of the February 14 deadline, introducing fiscal uncertainty that compounds concerns about monetary tightening. This dual pressure on both fiscal and monetary fronts creates an unusually constrained environment for risk assets.

Technical structure now determines the near-term trajectory. The US$2.17 trillion market capitalisation represents this year’s low and serves as critical psychological and algorithmic support. A decisive break below this threshold could trigger additional liquidations targeting the 78.6 per cent Fibonacci retracement near US$2.4 trillion.

Current positioning suggests markets may stabilise above the yearly low if macro conditions do not deteriorate further. Any sustained recovery requires reclaiming momentum toward the 38.2 per cent Fibonacci resistance at US$2.86 trillion. This level demands either a dovish pivot from central banks or significant organic capital inflows. Neither scenario appears imminent, given the Fed’s data-dependent stance and persistent institutional caution toward digital assets.

I view this correction as a necessary recalibration rather than a structural breakdown. Crypto markets have expanded dramatically since the previous cycle, attracting capital that entered during periods of abundant liquidity. As monetary conditions normalise, weaker hands exit, concentrating ownership among long-term holders with higher conviction.

This consolidation phase, though painful in the short term, often precedes more sustainable growth trajectories. The current market cap of US$2.3 trillion still reflects substantial institutional adoption compared to prior cycles, suggesting foundational demand remains intact despite tactical withdrawals.

Tomorrow’s US Consumer Price Index report looms as the next pivotal data point. Should inflation show unexpected moderation, markets might reprice rate cut expectations forward, providing temporary relief. I remain sceptical that one data release will override the Fed’s commitment to ensuring inflation remains anchored.

The central bank has consistently prioritised credibility over market comfort, and recent communications suggest officials welcome some financial tightening to reinforce their anti-inflation resolve. Crypto markets must therefore navigate an extended period of constrained liquidity rather than anticipating imminent policy relief.

The path forward demands discernment between cyclical pressure and secular decline. Digital assets face genuine headwinds from tighter monetary policy, but their underlying utility continues expanding across payments, identity, and programmable finance. The current two per cent drawdown represents a liquidity-driven adjustment within a maturing asset class, not a verdict on blockchain’s long-term viability. Investors who recognise this distinction will view periods of extreme fear not as exit signals but as opportunities to accumulate quality assets at discounted valuations.

Markets ultimately reward patience during liquidity droughts, though the duration of such periods remains unpredictable. For now, preservation of capital and selective positioning offer wiser strategies than either panic selling or aggressive leverage. The US$2.3 trillion market cap reflects a market in transition, shedding speculative excess while retaining its core value proposition for those willing to endure the volatility inherent in technological transformation.

 

Source: https://e27.co/crypto-market-cap-drops-to-us2-3t-as-fed-rate-cut-hopes-fade-after-hot-jobs-report-20260212/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Fed rate cut odds hit 85 per cent: Here’s how stocks, crypto, and gold are reacting

Fed rate cut odds hit 85 per cent: Here’s how stocks, crypto, and gold are reacting

Market movements have shaped a complex but increasingly hopeful outlook across both traditional and digital asset markets, primarily fuelled by evolving expectations about Federal Reserve policy. Central to this momentum is a mounting belief that interest rate cuts are on the horizon. Financial markets now place an 84.9 per cent likelihood on a 25 basis point reduction at the December FOMC meeting. This shift in sentiment has ignited a widespread rally, pushing equities, commodities, and cryptocurrencies higher in a coordinated risk-on surge that underscores how tightly asset prices are now linked to macroeconomic signals.

The labour market data released on November 26 provided critical fuel for this optimism. Initial jobless claims for the week ending November 22 fell to 216,000, marking the lowest level since mid-April and coming in well below the median forecast of 226,000. This third consecutive weekly decline signals continued resilience in the employment sector, but in the current environment where inflation appears to be moderating and growth concerns linger, the market interpreted the report as dovish. This interpretation aligns with UOB’s ongoing forecast of a 25 bps cut in December, now seemingly corroborated by real-time market pricing.

Equity markets responded enthusiastically. On Wednesday, November 26, the S&P 500 rose 0.7 per cent, the Nasdaq gained 0.8 per cent, and the Dow Jones Industrial Average climbed 0.7 per cent, with technology stocks leading the charge. The gains extended a four-day winning streak in a holiday-shortened week, underscoring investor confidence in a pivot toward looser monetary conditions.

Notably, the US market closed early in observance of Thanksgiving, leaving Asian markets to carry the momentum into the next trading session. This global transmission of sentiment was evident in South Korea’s KOSPI, which surged 2.67 per cent on November 26 to close at 3,960.87, its strongest single-day advance in weeks. Regional indices across Asia followed suit, reinforcing a strategic tilt toward non-US value and mid-cap equities as sources of alpha, particularly in technology and dividend-yielding sectors.

Fixed-income markets reflected a more cautious recalibration. The yield on the 10-year US Treasury note held steady at approximately 4.00 per cent, while the 2-year yield edged slightly higher to 3.47 per cent, resulting in a 10Y-2Y spread of about 53 basis points. This modest flattening suggests that while near-term rate expectations are shifting, longer-term inflation and growth concerns remain anchored. Nevertheless, the widening spread between equities and bonds is beginning to make fixed income more attractive, prompting institutional investors to accumulate high-quality bonds in anticipation of a Fed pivot gradually. The relative stability of the 10-year yield amid equity rallies suggests the bond market is not fully pricing in aggressive easing but remains open to modest cuts if inflation data cooperate.

Currency and commodity markets further validated the risk-on narrative. The US dollar weakened broadly, with Asian currencies like the Korean won and Singapore dollar strengthening as the expected narrowing of the Fed-Asia yield differential reduced the appeal of dollar-denominated assets. Brent crude oil edged higher to US$63.04 per barrel, supported by expectations that lower interest rates could stimulate global demand. Even more striking was gold’s ascent to US$4,163.51 per ounce, a 0.8 per cent increase that reaffirmed its role as a defensive hedge amid monetary uncertainty. Gold’s performance, up nearly 58 per cent year-to-date, reflects not just inflation hedging but also a broader loss of confidence in fiat monetary regimes, a theme that resonates deeply in the cryptocurrency space.

Speaking of crypto, the digital asset market rallied 2.5 per cent over the 24 hours ending November 27, reclaiming a market capitalisation near US$3.07 trillion, a key Fibonacci retracement level. This rebound emerged from a state of extreme fear, as measured by sentiment indicators, and closely tracked the Nasdaq’s gains, with a 24-hour correlation of plus 0.84. Three interlocking forces drove this recovery.

First, technical indicators signalled a classic oversold bounce. Bitcoin’s RSI-14 had dipped to 36.09, bordering on oversold territory, while the MACD histogram turned positive, reflecting a shift in momentum. This setup was amplified by a short squeeze; US$74 million in leveraged positions were liquidated, with 87 per cent attributed to short sellers. Such dynamics often accelerate upward price action as forced buying meets opportunistic dip-buying.

Second, Ethereum witnessed significant off-exchange accumulation. On-chain data from Santiment showed a 49 per cent weekly decline in ETH exchange reserves, equivalent to roughly US$4 billion in value. This movement suggests large holders, whales, and institutions are withdrawing supply from liquid markets, tightening available float, and reducing immediate sell pressure. The trend was reinforced by BlackRock’s ETH ETF, which recorded US$92.6 million in inflows on November 24, its first positive flow in two weeks. This institutional re-engagement, occurring just as ETH tests the 3,000-dollar resistance level, points to strategic positioning ahead of potential macro catalysts.

Third, macro tailwinds provided the overarching narrative. With an 85 per cent market-implied probability of a December rate cut, risk assets across the board benefited from renewed liquidity expectations. However, sustainability remains uncertain. Bitcoin’s Puell Multiple, a metric comparing daily miner revenue to its 365-day average, stands at 0.67, above historical bear market bottoms but not yet signalling undervaluation. This suggests that while the macro backdrop is supportive, crypto-specific fundamentals have not yet reached a point of compelling long-term value.

In conclusion, today’s rally is a fragile synthesis of technical relief, institutional accumulation, and macro optimism. The alignment between crypto and equities, particularly the Nasdaq, has turned digital assets into a high-beta proxy for Fed policy expectations. This very correlation exposes crypto to reversal if incoming data, such as the US PCE inflation report, contradicts rate-cut assumptions. Should the Fed deliver as expected, the stage may be set for a sustained recovery. But without improvements in on-chain fundamentals, network activity, user adoption, and real yield generation, the rally may prove ephemeral, a mere leveraged echo of traditional market sentiment rather than a foundation for a new paradigm.

 

Source: https://e27.co/fed-rate-cut-odds-hit-85-per-cent-heres-how-stocks-crypto-and-gold-are-reacting-20251127/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j