Gold Surges as Risk Aversion Impacts Crypto and Bitcoin: Americas Crypto Daybook

The Americas Crypto Daybook will be taking a temporary break starting from Wednesday, resuming on January 5 with our regular updates on overnight developments and daily previews. We wish you a joyous holiday season. By Omkar Godbole (times are ET unless otherwise stated). The mood in the crypto market remains cautious ahead of the US GDP report, expected to show the world's largest economy maintained its strength in the third quarter. Bitcoin, the largest cryptocurrency by market value, dropped to $87,500 after failing to sustain gains above $90,000 on Monday. All 16 CoinDesk indexes are down over the past 24 hours, with the DeFi Select index falling 4% and the metaverse index losing over 3%. HASH and RAIN are the only top-100 tokens by market cap to have seen gains of more than 6% in the last 24 hours. The overall weakness in the market is puzzling, given the continued decline in the dollar index, which typically favors risk assets, including cryptocurrencies. The DXY has fallen below 98.00 and is nearing its lowest level since early October. According to Alex Kuptsikevich, chief market analyst at FxPro, 'The decline in cryptocurrencies is happening against a backdrop of a significant rally in gold and other precious metals, as well as a weakening dollar. This highlights a shift in the attitude towards risk, also reflected in the sell-off of global bonds.' He added, 'In the coming weeks, we may see a more pronounced decline in cryptocurrencies, along with a spread of risk aversion to stocks and currencies of developing countries.' At 8:30 a.m., the US Bureau of Economic Analysis will release its preliminary estimate for the third-quarter gross domestic product. Most economists predict an annualized growth rate of 3.2% for the period, with some expecting 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 since late 2021. A weaker-than-expected print could lead to increased demand for BTC, although 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 largely unchanged, indicating a lack of clear direction 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. Meanwhile, the yen strengthened against the dollar on speculation that the Bank of Japan might intervene in FX markets to halt the currency's recent decline. Stay alert. For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today. What to Watch: For a comprehensive list of events this week, see CoinDesk's 'Crypto Week Ahead'. Token Events: See CoinDesk's 'Crypto Week Ahead' for a more comprehensive list. Conferences: See CoinDesk's 'Crypto Week Ahead' for a more comprehensive list. Market Movements: Bitcoin Stats, Technical Analysis, Crypto Equities, Crypto Treasury Companies, ETF Flows, Spot BTC ETFs, Spot ETH ETFs. Source: Farside Investors. While You Were Sleeping