The crypto market has just benefited from multiple regulatory policies and the personnel case of the new SEC Chairman Paul Atkins. The price of Bitcoin once broke through $100,000 by absorbing funds from altcoins, but then fell back to $98,000 due to investors' profit-taking. In terms of weekly returns, altcoins such as XRP, BNB, ADA and TRX have all had excess increases of more than 10% to 30%.
Altcoins have benefited from the outflow of Bitcoin funds, causing a large amount of cryptocurrency funds to flow from Bitcoin to altcoins. The main driving force is that fund companies have begun to actively apply for crypto token ETFs, trying to break through regulatory restrictions other than Bitcoin and Ethereum spot ETFs. In addition, the new SEC Chairman Paul Atkins is the founder of a crypto digital asset company and also serves as one of the founders of the Token Alliance. Naturally, he is relatively friendly to crypto tokens.
Based on such a political background, crypto token spot ETFs naturally become an excellent target for capital inflows, but the speed of increase may be too fast. For example, XRP rose by more than 30% in one day, and other AVAX and LINK also rose due to the optimistic outlook for the future token economy. In the future, DeFi-related concept tokens may have the possibility of subsequent increases, and investors can pay more attention.
It is worth noting that TRX has also become a target of capital speculation, with a weekly increase of more than 50%. Capital sentiment is very crazy, which is generally believed to be affected by the martial law in South Korea. Currently, TRX is a relatively common channel for transferring USDT in South Korea, but there are still several specific capital speculations involved. Because South Korea lifted martial law a few hours later and did not cause TRX to collapse back to its original price, the fundamentals are not that referenceable.
After a large amount of funds poured into altcoins, due to the sharp increase in price, funds were gradually transferred from altcoins to Bitcoin after profit taking. Both retail investors and institutions began to buy Bitcoin, pushing the price of Bitcoin to exceed US$100,000 at one point. This was followed by another wave of profit taking on Bitcoin, and finally the price also fell back, forming the current consolidation situation.
U.S. economic data is the biggest risk
Due to the rapid growth of the crypto market, the market has already experienced two capital rotations. This is actually not very healthy. The market is currently ignoring the overall economic risks, especially the risk of a US recession or a deteriorating job market. Current investors are assuming that the US economy will be better after Trump takes office, especially in terms of deregulation, tax cuts and tariffs, which will keep the US economy on its current track.
Judging from the non-farm employment data released on Friday, the number of new non-farm jobs announced in the United States in November was 227,000, higher than the original expectation of 200,000, indicating that the job market is rebounding strongly. It was significantly higher than market expectations, indicating that wage growth remains resilient.
However, as the denominator of the labor participation rate declined, the unemployment rate rebounded from 4.1% to 4.2%, which brought some concerns to the market about the labor market recession. The US dollar index also fell. Subsequent institutions may bring in more "US recession" themes to scare off risky asset holders.
Currently, employment data has become an important reference for the Fed's December interest rate decision. Although the market's expectations for a rate cut in December are as high as 70%, some officials, including Chairman Powell, have expressed caution and may choose to postpone further rate cuts. The strength of the job market recovery will affect the trend of the US dollar.
If the U.S. job market continues to grow strongly, the dollar may appreciate further, boosting investor confidence; if it performs poorly, it may trigger a correction. In the long run, most institutions dare not remain pessimistic about the U.S. economy. At this time, it is a safer strategy to follow the opinions of the majority. Most expect the dollar to continue to strengthen in the first half of 2025.
Under the premise that Trump is confirmed to take office, the Biden administration does not need to continue to relax policies to maintain a good employment rate, and can let the economy develop freely. Therefore, the government-supported employment data is unlikely to continue to improve. From this point of view, the original positive factors that maintain the strength of the employment market will disappear, and the possibility of subsequent employment data exceeding expectations is not high. The US economic recession is currently the biggest risk factor in the crypto market. It is recommended that everyone remain calm about the current overheated market situation.
