Year-End Financial Market Overview

On December 31, news from 4E monitoring shows that U.S. stocks fell broadly on Monday without any significant negative factors, with all three major indexes closing down about 1%. Technology stocks, except for Nvidia which rose 0.35%, mostly declined.

However, the S&P 500 rose about 24% for the year, the Dow Jones increased about 13% (both the best since 2021), and the Nasdaq surged nearly 30% marking the longest consecutive quarterly gains.

The crypto market has been under pressure, with Bitcoin continuing to pull back after reaching a record high on December 17, dropping to a low of $91,530 last night, marking a two-week low, and down over 15% from its peak, yet it still rose nearly 110% for the year.

Altcoins have also fallen, many have given back their gains from this round. Amid the broad market decline, AI concept meme tokens surged, with tokens like ai16z and ELIZA hitting new highs with noticeable capital inflow.

In the forex and commodity sector, the U.S. dollar index rose about 0.1% to near a two-year high, with an annual increase of 6.7%; the euro depreciated 5.7% against the dollar, and the pound fell 1.2%. Oil prices saw a slight increase, with U.S. crude near $71, rising over 1% during the session.

Spot gold fell over 0.5% to below $2,600, with an annual increase of nearly 27%.

Year-end financial market trading is light, with profit-taking prevalent, and tight liquidity has become the path of least resistance for declines.

Historically, after large institutions sell off risk assets to balance their portfolios at year-end, they often start building positions in January, which increases the probability of a January rally.

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