Crypto Market Analysis: Awaiting a Catalyst

Bitcoin has rebounded to nearly $90,000 after a drop on Sunday, now trading relatively unchanged over 24 hours. The broader market, including the CoinDesk 20 and CoinDesk 80 indexes, also remains largely unchanged, with the RAIN token being the notable exception, having gained over 6%. This recovery aligns with the 0.5% increase in S&P 500 and Nasdaq futures, as well as the continued weak dollar. According to Timothy Misir, head of research at BRN, 'Price action is compressed. Volatility is present, but conviction is not. This remains a market waiting for a catalyst.' This week, various economic data releases, including U.S. retail sales, jobs data, inflation reports, and multiple Fed speakers, are expected to influence expectations for interest rate changes next year. Additionally, the Bank of Japan is anticipated to raise rates by 25 basis points. Misir noted, 'Any upside surprise risks reinforcing the 'hawkish cut' narrative, while softer data could reopen the door for risk assets into year-end. For crypto, macro sensitivity remains elevated until clarity emerges.' The Crypto Fear & Greed Index indicates a fearful market sentiment, which could support price gains, especially after nearly $300 million in leveraged bets were wiped out over 24 hours, mostly longs. However, bears also have reasons to be optimistic, given the MOVE index suggesting renewed bullishness or increased bond-market turbulence, and the Nasdaq's technicals pointing to an end of the recovery rally from November. Furthermore, BTC's options market shows a bias for puts across multiple timeframes. In other news, BTC's hash rate has reportedly fallen 8% to 1,200 EH/s, attributed to the closure of mining farms in Xinjiang, China. The U.S. Securities and Exchange Commission has released a wallet and custody investor guide, outlining risks and best practices. In traditional markets, gold has extended its gains, while some analysts warn that the downside in the Dollar Index looks limited.