Gold Surges as Risk Aversion Impacts Bitcoin: Crypto Market Update

Crypto Daybook Americas is taking a temporary break starting Wednesday and will resume on January 5, bringing you the latest developments in the crypto industry. Wishing you a joyous holiday season. The crypto market remains subdued ahead of the US GDP report, which is anticipated to show the world's largest economy maintained its growth in the third quarter. Bitcoin, the largest cryptocurrency by market capitalization, dropped to $87,500 after failing to sustain gains above $90,000 on Monday. All 16 CoinDesk indexes have declined over the past 24 hours, with the DeFi Select index and metaverse index experiencing losses of 4% and 3%, respectively. The only top-100 tokens by market capitalization to have gained over 6% in the past 24 hours are HASH and RAIN. Despite the decline in the dollar index, which typically favors risk assets like cryptocurrencies, the overall tone remains weak. According to Alex Kuptsikevich, chief market analyst at FxPro, this decline occurred against the backdrop of a significant rally in gold and other precious metals, as well as a weakening dollar, highlighting a shift in the underlying attitude towards risk. In the coming weeks, an even more pronounced decline in cryptocurrencies is expected, along with the spread of risk aversion to stocks and currencies of developing countries. The US Bureau of Economic Analysis will release its preliminary estimate for the third-quarter gross domestic product at 8:30 a.m. Most economists predict an annualized growth rate of 3.2% for the period, with some expecting a growth rate as high as 3.5%. These figures indicate a slowdown from the second quarter's 3.8% pace but still exceed the 2.6% average maintained since late 2021. A weaker-than-expected print could potentially reignite demand for BTC, but it will be interesting to see if it can sustainably push prices above $90,000, a level that has acted as a ceiling recently. In traditional markets, futures tied to the S&P 500 and Nasdaq are relatively unchanged, indicating a lack of directional clarity at the opening bell. Historically, these indexes have performed well during the final days of the year. Gold's rally continues, with the metal approaching $4,500 per ounce. The yen has strengthened against the dollar on speculation that the Bank of Japan could intervene in FX markets to stall the currency's recent decline.