In a significant market shift, Bitcoin has surged past $87,000, alongside a rise in Ethereum, as traders responded to positive economic indicators. The Asian markets rallied after the Bank of Japan (BOJ) raised its benchmark interest rate to its highest level in three decades. This move coincided with U.S. inflation data showing a lower-than-expected increase, which further boosted investor sentiment.
The BOJ”s decision to increase rates has led to Japan”s 10-year government bond yield briefly touching 2% for the first time since 2006. As the markets absorbed this adjustment, the Japanese yen weakened against other currencies, while the MSCI Asia Pacific Index climbed by 0.7%, driven primarily by gains in technology stocks.
In the cryptocurrency sphere, the rally extended beyond Bitcoin and Ethereum. Other notable tokens such as Cardano”s ADA, Solana”s SOL, Dogecoin, BNB, and XRP also saw increases of up to 3%. The CoinDesk 20 index experienced a 2% rise during this positive trading session.
Prior to this bounce, the crypto market had experienced heightened volatility, with over $576 million in liquidations reported within a 24-hour span, primarily affecting long positions as leveraged traders exited their trades amid the market fluctuations.
The U.S. stock markets mirrored this positive trend, with the Nasdaq Composite leading the charge, gaining 1.4%. The S&P 500 followed with an increase of 0.8%, while the Dow Jones Industrial Average rose by 0.2%.
The technology sector specifically benefited from the strong earnings report of Micron Technology. The company exceeded expectations in its quarterly results, forecasting adjusted profits for the next quarter that were nearly double analysts” predictions. Micron”s stock rose by 10% following the announcement, alleviating investor concerns regarding artificial intelligence spending that had previously pressured the tech sector.
Additionally, the November Consumer Price Index (CPI) revealed a year-over-year inflation increase of 2.7%, which was below the 3% estimate. Core inflation also came in lower than anticipated at 2.6%, compared to a 3.1% forecast. This unexpected decline in inflation has shifted market expectations regarding Federal Reserve policy, with investors now considering a higher likelihood of interest rate cuts in the near future.
Jobless claims for the week ending December 13 totaled 224,000, reflecting a decrease of 13,000 from the previous week. However, recent employment data has shown volatility, influenced by the ongoing federal government shutdown.
On-chain metrics indicate a notable shift among Bitcoin holders, with long-term holders seemingly concluding a prolonged phase of selling, according to K33 Research. Approximately 20% of Bitcoin”s supply has cycled back into circulation over the past two years.
Futures tracking U.S. equities continued their upward trajectory, buoyed by the BOJ”s rate decision and the cooling inflation in the U.S. The technology sector in Asia performed particularly well during this trading session. As the year draws to a close, traders remain vigilant, as market liquidity often decreases during this period, despite the ongoing use of high leverage in crypto markets.
In a notable development outside the immediate crypto sphere, Trump Media & Technology Group announced a $6 billion merger with Tae Technologies, backed by major firms like Alphabet and Chevron. Following this announcement, shares of Trump Media surged as investors anticipated increased demand driven by AI in the energy sector.
