Crypto Market Wobbles to Start the Week as Traders Retreat
14 Dec 2021 · 3rd Party Analysis
- Crypto market pulls back amid an increased selling momentum early in the trading week
- Investors take risk off the table as global markets expect latest Federal Reserve update
What’s Trading in the Markets?
Cryptocurrencies turned lower to start the week as selling pressure dominated across global financial markets. From stocks to bitcoin, major asset classes pulled back in anticipation of a key Fed meeting ahead.
Bitcoin, the world’s largest digital currency, slipped to a low of $45,700. In other words, the orange coin dropped about 6% on the day as the decline affected all major tokens. Ether, for example, declined roughly 10% after it had logged two consecutive days of gains.
Broadly, the cryptocurrency market slipped from a valuation of $2.3 trillion to levels near $2.1 trillion.
Early on Tuesday, the gloomy market sentiment continues to cast a shadow over major coins. This said, the price of bitcoin today hovers around $46,750 per token. The Ethereum coin, on the other hand, is trading slightly above $3,700 as US traders shift into gear for today’s session.
Dive Deeper in the Financial World
Meanwhile, stocks and currency pairs are defined by increased market jitters this week. In more detail, stocks on Wall Street drifted lower to post their worst day in roughly two weeks. As a result, the S&P500 retreated from its all-time high, its 67th record of the year.
Additionally, the Dow Jones Industrial Average and the tech-focused Nasdaq Composite logged a losing session by 0.9% and 1.4%, respectively.
A cautious tone has spread over the markets early on Tuesday. More specifically, futures contracts on major US indexes were pressured but managed to emerge slightly in the green ahead of the bell. European markets opened fairly flat to modestly higher.
Also, crypto assets are struggling to gain some upside momentum with bitcoin’s price gyrating near unchanged levels for the day.
The risk-off mood is prevailing over financial markets as traders anticipate the Fed’s final meeting of 2021.
What to Expect in the Markets?
To this end, the big event of the week, a two-day Fed policy meeting, unfolds today. Central bankers in the US convene Tuesday and Wednesday to discuss how to approach the US economy. Several challenges lay ahead that may shift the Fed’s outlook going into 2022.
On the one hand, surging inflation is likely to prompt the Fed to speed up the pace of its bond purchase reduction. This is a key factor that could impact the direction of stocks, currencies and even crypto.
Also, traders will be watching for insights into the Fed’s expected rate hike. Fed Chair Jerome Powell has previously said policymakers plan to increase interest rates in deep 2022. Now, however, the overheating economy could fuel a more aggressive action on the Fed’s side towards a cooldown.
As a result, Mr. Powell might offer surprises on Wednesday during his press conference.
Economic News Today (EST time)
Markets today will be looking for the US producer price index report slated for 08:30 am. Later, the Reserve Bank of New Zealand holds a press conference with Governor Adrian Orr.