Good Morning, Asia. Here’s the latest news from the markets:
Welcome to the Asia Morning Briefing, your daily recap of key stories during U.S. hours, alongside an overview of market trends and analysis. For a comprehensive view of U.S. markets, refer to CoinDesk’s Crypto Daybook Americas.
Bitcoin is fluctuating around 90k after a weekend of notable but short-lived price swings that highlighted the thinning liquidity at year-end.
According to a recent note, QCP mentions that perpetual open interest in both BTC and ETH has almost halved since October, indicating a diminished market capacity to absorb directional trades.
Additionally, Polymarket odds indicate that traders have already accounted for this week’s 25 bps cut and are leaning towards a pause in January, suggesting that investors expect a gradual easing trajectory rather than a full cycle.
This context clarifies why BTC remains confined within a range, driven by a lack of market activity, and points to the potential for significant price movements stemming from guidance surprises rather than the rate decision itself.
“While the Fed’s cut may grab headlines, the more crucial change is the widening divergence in policy signals among major central banks. The BOE is split, the ECB remains steady, and the BOJ is gearing up to tighten at yield levels not seen since 2007, all against a backdrop of escalating tensions in key Asian economies,” Gracie Lin, CEO of OKX Singapore, shared in an interview with CoinDesk.
Lin emphasized that the recent clearing of leveraged positions has strengthened market structure by eliminating overcrowded trades, allowing prices to adjust without forced flows. Following this reset, she noted, bitcoin managed to inch back towards 91k as global capital adapts to a mixed bag of macro signals.
This scenario sets the stage for a market where direction will largely depend on traders’ interpretation of the Fed’s guidance and the broader policy divide rather than the already priced-in rate change.
Market Movement:
BTC: Bitcoin dipped toward $90,000 on Monday after early U.S. trading erased a brief weekend lift, leaving the market trapped in a narrow range as rising bond yields and weaker equities pressed on risk assets.
ETH: Ether edged down slightly in line with the broader market but continued to outperform relatively, briefly reaching its highest level against bitcoin in over a month.
Gold: Gold saw a minor decline on Monday as traders approached the Fed’s policy meeting with caution, with markets anticipating a strong likelihood of a rate cut and awaiting Powell’s direction on forthcoming moves.
Nikkei 225: Asia-Pacific stocks fell on Tuesday, following Wall Street’s downturn as investors remained wary ahead of a widely anticipated 25 bps Fed rate cut and looked for guidance on the central bank’s next actions.
Other Crypto Updates:
- 40% of Canadian Crypto Users Identified for Tax Evasion Risk, Canadian Tax Authority Reports (CoinDesk)
- Ondo Finance Announces Closure of Biden-Era SEC Investigation Without Charges (Decrypt)
