Good morning Asia. This is what is making news in the markets:
Welcome to Asia Morning Briefing, a daily summary of top news during US time and an overview of market movements and analysis. For a detailed overview of the US markets, see CoinDesk’s Crypto Daybook Americas.
Bitcoin hovers around 90,000 after a weekend of sharp but short-lived swings that exposed how tight liquidity has become at the end of the year.
In a recent note, QCP writes that criminal open interest in both BTC and ETH has almost halved since October, meaning the market’s ability to absorb directional trades is much weaker.
Meanwhile, Polymarket odds show traders have already priced in this week’s 25bp cut and are leaning towards a pause in January, indicating investors are expecting a shallow easing path rather than a cycle.
The combination explains why BTC remains range-bound, due to a lack of market activity, and why outsized moves are more likely to come from guidance surprises than the rate decision itself.
“The Fed’s rate cut may be the headline, but the biggest change is the growing gap in policy signals between major central banks. The BOE is divided, the ECB is holding firm, and the BOJ is preparing to adjust yields to levels last seen in 2007, all against a backdrop of growing friction between major Asian economies,” Gracie Lin, CEO of OKX Singapore, told CoinDesk in an interview.
Lin added that the recent liquidation of leveraged positions has improved market structure by eliminating crowded trades, giving prices room to move without forced flows. With that reset, he said bitcoin was able to pull back towards 91k as global capital adjusts to an uneven set of macroeconomic signals.
All of this sets the stage for a market where direction will depend on how traders interpret guidance from the Federal Reserve and the broader political divide, rather than the rate move that everyone has already priced in.
Market movement:
BTC: Bitcoin fell toward $90,000 on Monday after early U.S. trading erased a brief weekend bounce, leaving the market stuck in a tight range as rising bond yields and weaker stocks pressured risk assets.
ETH: Ether dipped slightly along with the broader market, but continued to outperform on a relative basis and briefly touched its highest level against bitcoin in over a month.
Gold: Gold fell slightly on Monday as traders remained cautious ahead of the Federal Reserve’s policy meeting, as markets priced in a high probability of a rate cut and awaited Powell’s guidance on further action.
Nikkei 225: Asia-Pacific stocks fell on Tuesday, tracking Wall Street’s slide as investors remained cautious ahead of an expected 25 basis point rate cut by the Federal Reserve and awaited guidance on the central bank’s next steps.
Elsewhere in Crypto:
- 40% of Canadian cryptocurrency users are flagged for risk of tax evasion, reveals the Canadian tax authority (CoinDesk)
- Ondo Finance Says Biden-era SEC Investigation Closed Without Charges (Decrypt)
