Last week was the Thanksgiving holiday in the United States, and the market volume was light, and the overall consolidation pattern was maintained. The U.S. stock market is about to make history again. 2024 will be one of the best years in history, and the return rate has reached double-digit highs in 5 of the past 6 years.
Market breadth remains supportive, with the 52-week equity high/low spread still looking healthy and the uptrend intact, while the VIX is trending lower, while calm has returned to the Treasury market following Trump’s announcement that Scott Bessent will be Treasury Secretary, with the 10-year yield down nearly 35 bps from its October high.
Aside from the so-called 'support for cryptocurrencies' stance, Bessent is also a proponent of fiscal hawkishness and an independent Federal Reserve. His proposed 3-3-3 plan (reducing the fiscal deficit to 3% of GDP, increasing real GDP growth to 3%, and increasing daily energy production by 3 million barrels) has brought relief to the U.S. fixed income market, and since his nomination, the yield curve premium has remained stable at current levels.
Although there are still doubts about his core views, reporters found that he is 'long-term bullish' on gold due to the central bank's continued accumulation when researching his early speeches. Will this have a spillover effect on Bitcoin, especially in light of recent discussions about strategic reserve portfolios? At the very least, the next four years will undoubtedly be very interesting.
Traders will return to a busy week, gearing up for the last non-farm payroll data release of the year. Despite newly emerging concerns about rising inflation, the market still expects a roughly 65% chance of interest rate cuts, although the expectations for rate cuts in 2025-2027 have significantly decreased given the strong economic conditions. In terms of employment data, the market expects overall employment numbers to rebound to around +160,000, while the unemployment rate is expected to remain around 4.3%. Given the recent softness in PMI surveys and high-frequency employment data, the final data results may also come in below expectations, but unless there are extremely surprising outcomes, risk sentiment may still remain positive.
The optimistic sentiment in the cryptocurrency market remains prevalent, but this week's focus is on Ripple, as XRP surged an astonishing 73% in anticipation of the government potentially dropping its long-standing lawsuit. This significant rally has helped XRP surpass USDT, becoming the third-largest cryptocurrency by market capitalization. Anticipating this development, whale addresses have been actively buying (and are now selling) XRP over the past month.
The current rally is primarily concentrated in mainstream coins (excluding ETH), with BTC leading the charge, while altcoins are still struggling to return to their January highs. Although the recent successes of L2 and protocol-transforming blockchains (like Hyperliquid) continue to dominate attention in the cryptocurrency market, we are seeing some improvements in Ethereum through the inflow of ETH ETFs, with over $330 million flowing in last Friday. Will we see more secondary mainstream coins rebound before the end of the year?
In any case, the fundamental indicators for cryptocurrencies remain optimistic, with the market capitalization of stablecoins finally surpassing the highs during the Terra-Luna era. Stablecoins are typically the first stop for most fiat users entering the cryptocurrency market, and a higher market capitalization (price stable, thus entirely driven by quantity) indicates greater mainstream participation.
As investors pour in more new funds, will the new year see faster growth? Let's hope so!
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