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Today, cryptocurrency prices have sharply increased due to a boost in market sentiment and institutional investments.
Summary
- Optimism in the market has improved with a decrease in liquidations as risk tolerance returns.
- Institutional investments and ETF activities are fostering short-term price increases.
- Investors are closely monitoring upcoming decisions by the Fed and BOJ, which may influence trends in Q4.
At press time, Bitcoin surged by 8% to $93,786, Ethereum regained momentum above $3,000, and BNB surpassed $900. Several smaller altcoins recorded even more significant increases, with Sui skyrocketing 30%, Pudgy Penguins up 26%, and Hyperliquid gaining about 10%.
Investor confidence is also improving. The Crypto Fear & Greed Index rose five points to 28, moving from “Extreme Fear” to the “Fear” category.
As per CoinGlass statistics, 24-hour liquidations decreased by 1.8% to $482 million, while the total crypto market’s open interest increased by 7% to $134 billion. With an average relative strength index of 54, the market currently sits in neutral territory.
Key Drivers of Crypto Prices Today
Following over $1 billion in liquidations last week, the reduction in short-term selling has aided in stabilizing prices, attracting institutions and major players back into the market. Bitcoin spot ETFs saw inflows of $58 million on December 2, while Ethereum experienced $10 million in inflows.
Companies like BitMine Immersion Technologies acquired more than $100 million in ETH during the market decline. Positive updates from regulatory bodies and indications of a crypto-friendly Federal Reserve chair have motivated investors to extend their positions.
Expectations surrounding a Federal Reserve rate cut have also sparked interest in riskier assets. Polymarket’s odds for a rate cut in the upcoming December 15–16 meeting surged to 90%, up from below 50% in late November. Adding to the excitement, Vanguard started offering crypto ETFs and mutual funds to its 50 million retail clients, creating new demand in the marketplace.
Ethereum’s anticipated Fusaka upgrade is scheduled to launch on December 3, aiming to deliver quicker transactions, reduced fees, and enhanced layer-2 integration.
Macro Trends and Short-Term Outlook
Market participants are keenly observing the Bank of Japan’s mid-December meeting. A clear indication of an imminent rate hike could drive yields higher and exert pressure on cryptocurrencies. Simultaneously, markets are anticipating a Fed rate cut. If the BOJ increases rates while the Fed decreases them, the emerging disparity between U.S. and Japanese rates could exacerbate volatility in digital assets.
Despite short-term fluctuations, the long-term outlook remains optimistic. Glassnode indicates that Bitcoin has attracted $732 billion in new capital this cycle, with one-year realized volatility reduced almost by half.
Citi Research suggests that while speculative ups and downs are likely to continue, the macroeconomic environment still appears favorable for risk assets, bolstered by consistent ETF inflows. Meanwhile, Sygnum Bank notes that overall momentum remains robust, even as global tariff concerns and ongoing quantitative tightening present potential challenges.
While market volatility might test support levels around $82,000, many analysts remain optimistic about BTC reaching between $125,000 and $200,000 by the year’s end.
