The Federal Reserve's fixed-rate reverse repurchase agreement (RRP) usage has fallen to $98.356 billion, the first time it has been below $100 billion since April 2021. In January 2022, the probability of maintaining interest rates unchanged is 91.4%, and in March, the probability is 47.6%. The cumulative probability of a 25 basis point rate cut is 48.3%.
Returning to the topic:
SEC Commissioner Hester Peirce expressed optimism about re-examining two SEC decisions regarding cryptocurrency ETFs, in an interview with Coinage: the possibility of physical redemptions and ETH ETFs starting staking may be reconsidered. Hester Peirce expressed optimism about the potential for these changes under the new SEC management. Trump appointed former college football player and House candidate Bo Hines as the executive director of the Presidential Digital Asset Advisory Committee, which Trump referred to as the "Crypto Committee." Trump stated that in this new role, Bo Hines will be responsible for collaborating with David Sacks on crypto and artificial intelligence, promoting innovation and growth in the digital asset space while ensuring that industry leaders have the resources they need to succeed. They will work together to create an environment for the industry to thrive and continue to be a cornerstone of technological advancement. On December 23, the cryptocurrency fear and greed index fell to 70 (the average last week was 83), marking the lowest market sentiment since December. Coinglass data shows that there was a cumulative net outflow of 15,045.33 BTC from CEX in the past 7 days. Lookonchain data indicates that El Salvador increased its holdings by 29 BTC in the past week, bringing the total to 5,995 BTC. Matt Hougan, Chief Investment Officer of Bitwise Asset Management, attributed the recent pullback in the crypto market to "the natural clearing of leverage" and emphasized that "long-term drivers remain intact, and the market is still in a strong bull market."
Greekslive analyst Adam stated that this Wednesday is Christmas, and the European and American markets will enter a holiday break. Crypto funds usually see outflows during this week. This round of the bull market has not seen significant pullbacks, and a deleveraging trend before Trump's inauguration cannot be ruled out. The volatility expectations during this Christmas week are not large, and the market is more focused on betting on the trends around the end of January when Trump takes office. Analysis by ai_9684xtpa shows that BTC's performance during the Christmas and New Year holidays over the past five years, from December 20 to January 6, shows significant amplitude, but the actual rise and fall, except for 2020, are all within 10%. In 80% of the years, the performance of the coin price in the following two months has been quite good. If the reference time is narrowed to one week after New Year's Day, there is still a 60% chance of making a profit. Over the past five years, the NASDAQ index has had significant fluctuations during Christmas, but the overall rise and fall have been small, suggesting that US stocks won't have a significant negative impact on BTC after the holiday. CoinGlass data shows that the market value to realized value (MVRV) indicator shows that its MVRV-Z score has fallen from last week's peak of 3.3 to 2.84. Historically, an MVRV-Z score below 3.7 indicates that the asset is undervalued. The MVRV calculation method is to subtract the realized market value from the circulating market value and then divide that number by the standard deviation. During the last major adjustment in January 2021, the score was 7, suggesting that this score indicates BTC may rebound strongly in the coming weeks. Last week, the net inflow of BTC spot ETFs in the US was $457.2 million, and ETH spot ETFs had a net inflow of $62.7 million.
MicroStrategy has increased its holdings of 5,262 BTC at an average price of approximately $106,662, valued at about $561 million. As of December 22, 2024, MicroStrategy holds 444,262 BTC. CryptoQuant CEO released data stating that the combined BTC holdings of ETFs, governments in Europe and the US, and MicroStrategy now account for 31% of known BTC holdings. Glassnode states that as the crypto market grows, the magnitude of BTC's pullbacks in the bull market is gradually decreasing. The deepest pullback in this cycle was -32% (on August 5, 2024), with most pullbacks being around 25% from previous highs, reflecting increased demand for spot ETFs and rising institutional interest. Asset management company VanEck stated that if the US establishes a reserve of 1 million BTC according to the bill proposed by Senator Cynthia Lummis, by 2049, this reserve could account for 35% of the US national debt, offsetting about $42 trillion in liabilities. The Federal Reserve's fixed-rate reverse repurchase agreement (RRP) usage has fallen to $98.356 billion, the first time it has been below $100 billion since April 2021. At the end of September 2022, the usage once reached as high as $2.426 trillion. Barclays Bank stated that the Federal Reserve is expected to pause interest rate cuts after June next year, and after inflationary pressures dissipate, to resume cuts around mid-2026, anticipating two 25 basis point cuts in 2026, with a terminal rate of 3.25-3.50%. HSBC: Still expecting the Federal Reserve to cut rates by 75 basis points (3 times) in 2025.
According to LSEG IBES data, S&P 500 index earnings are expected to grow by 14% in 2025, with investors more confident in the economy compared to a year ago. Wells Fargo global market strategist Sameer Samana stated that ending 2024 on a good note suggests that 2025 may see a certain degree of re-acceleration, as markets often lead the economy, preparing early for economic re-acceleration. Garrett Melson, a strategist at BNP Paribas Asset Management, indicated that 73% of institutional investors said they would avoid a recession in 2025. If the returns of the previous two years are not achieved, the US stock index may still realize about 10% steady growth in 2025. Analyst Keith Lerner stated that the current bull market of the S&P 500 index, which began in October 2022, has lasted less than half the average duration of the previous 10 bull markets, with the S&P 500 index rising about 64% in this bull market, lower than the median increase of 108% and the average increase of 184% in previous bull markets. The probability of maintaining interest rates unchanged in January next year is 91.4%, and in March, it is 47.6%. The cumulative probability of a 25 basis point rate cut is 48.3%. Coinglass data shows that in the 11 historical "December" markets of BTC, there were 6 declines and 5 gains, possibly because the first quarter is usually a quarter when asset management companies conduct annual capital allocations. In the past 5 years, there have been bull markets in 4 of those years after Christmas.
The recent decline adjustment is mainly influenced by the negative impact of reduced expectations for Federal Reserve rate cuts, rather than a recession narrative in the economic fundamentals. Most Wall Street investment banks predict that stock indices will rise next year, with the end-of-year target price for the S&P 500 index between 6,000 and 7,000 points, while the index has recently hovered around 5,900 points. In the first quarter of 2021, BTC rose by 103.1%, and in the fourth quarter of 2020, it rose by 168%. Currently, BTC is up 47.1% in the fourth quarter of 2024, while the rise in the first quarter of 2025 is unknown. As BTC's market value increases, the rate of increase decreases, and the bullish trend continues. In the first quarter of 2021, Musk (Tesla) pumped BTC, pushing the market bubble to the end of the year; in the first quarter of 2025, Trump will take office, and the Federal Reserve is expected to cut rates in both the first and second halves of the year (with expectations of stopping balance sheet reduction in the first quarter), still a time for bubble growth. After Christmas/New Year, US stock index investors will return, traditionally reallocate in the first quarter, and the crypto market is likely to see another peak. Currently, it is in a low point of capital outflow before the holiday, waiting for the next peak.#圣诞行情分析