Risk Aversion Drives Gold Higher, but Hurts Bitcoin: A Crypto Market Update

The Crypto Daybook Americas will be taking a temporary break starting Wednesday and will resume on January 5, bringing you the latest news and updates from the crypto industry. Wishing you a joyous holiday season! The current mood in the crypto market remains subdued ahead of the upcoming US GDP data report, which is expected to show the world's largest economy remained stable in the third quarter. Bitcoin, the largest cryptocurrency by market value, experienced a decline to $87,500 after failing to maintain gains above $90,000 on Monday. All 16 CoinDesk indexes have seen a decline over the past 24 hours, with the DeFi Select index dropping 4% and the metaverse index losing over 3%. The only top-100 tokens by market cap to have gained more than 6% in the past 24 hours are HASH and RAIN. The overall weak tone in the market is puzzling, given the continued decline in the dollar index, which typically bodes well for risk assets like cryptocurrencies. The DXY has dropped below 98.00 and is nearing its lowest point since early October. According to Alex Kuptsikevich, chief market analyst at FxPro, 'The rally in gold and other precious metals, coupled with the weakening dollar, highlights a shift in the underlying attitude towards risk, also reflected in the sell-off of global bonds.' Kuptsikevich predicts that in the coming weeks, 'we can expect an even more pronounced decline in cryptocurrencies, as well as 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 forecast an annualized 3.2% growth rate for the period, with some expecting a print as high as 3.5%. These figures indicate a slowdown from the second quarter's 3.8% pace, yet still exceed the 2.6% average maintained since late 2021. A weaker-than-expected print could potentially reignite demand for BTC, but it remains to be seen whether it will sustainably lift prices above $90,000. 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, 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.