In the crypto market, volatility remains low. The BTC/USDt pair spent the week from December 26 to January 1 in the $16,350-$17,000 price range. At the beginning of the week, trading was calm, as Western exchanges did not work due to the Christmas holidays. By the end of the week, the demand for risky assets increased after the release of data on jobless claims in the US. Cooling labor market in the US eased fears of an aggressive tightening of the Fed's policy.
On Friday, December 30, the S&P500 index closed the year above 3725 p. As a result, its losses for 2022 amounted to 19.44%. For bitcoin, the situation turned out to be much worse. His losses are 64%. Several factors contributed to this collapse:
Investor risk aversion amid tighter monetary policies by central banks. In the US, inflation rose to a 40-year high. To fight inflation, the Central Bank raises rates.
The collapse of stock indices and an increase in the yield of Treasury bonds due to the actions of the US Federal Reserve.
Decreased confidence in crypto exchanges due to blocking of clients from Russia, the collapse of the Luna token and the decoupling of the algorithmic stablecoin UST from the dollar, the collapse of the FTX exchange.
Auditing firm Mazars Group has suspended work with all clients from the crypto industry after checking Binance’s bitcoin reserves.
The correlation between the S&P500 index and bitcoin for 90 days is minus 0.61, for 30 days - 0.72. The correlation between assets occurred after the collapse of the FTX exchange, but now the connection is being restored again. Since the S&P500 closed above 3,725, buyers have the opportunity to go to $18,500 during the New Year holidays. If the $16,000-$16,300 zone is broken, the risks of falling to $15,500 increase. On the daily timeframe, the situation is critical, so sales on the thin market can resume with renewed vigor at any time.
For buyers, there are no factors that could turn the market up. They are still depressed after the FTX crash. Exchanges need to regain investor confidence for a new rally. According to cycles, a favorable time for growth is from January 13 to June. Either we flat before the start of the growth phase, or the growth will start after the collapse. With such volatility, the situation remains uncertain and low activity of speculators.
In the week from January 2 to 8, the report on the US labor market for December is in the focus of investors' attention. According to the latest data from the CME FedWatch Tool, market participants are expecting a 25bp rate hike. with a probability of 67.7%. Data is important for the Fed - on December 6, we expect increased volatility after the publication of data