Crypto Market dynamics took a surprising turn as the global crypto market experienced a near 4% dip on Wednesday. Despite this downturn, Asian equities showed resilience, buoyed by optimism regarding a potential resolution to the US government shutdown.
Investors maintained a cautious stance with subdued activity across digital assets. The market capitalization tumbled sharply from $94 billion to $68 billion, while funding rates remained steady. Bitcoin ETFs in the US recorded a modest $1 million in net inflows. Notably, Bitcoin traded below its critical 200-day moving average of $110,000, encountering resistance and support at $103,000. Analysts predict that intensified selling pressure could drive Bitcoin to a support range between $86,000 and $82,000.
Crypto Market’s Current Performance
Amidst these fluctuations, the crypto market snapshot reveals:
- Bitcoin: $103,305, down 3.5%
- Ether: $3,438, down 5.2%
- XRP: $2.40, down 5.6%
- Total crypto market cap: $3.56 trillion, down 3.5%
Traders Focus on Washington’s Shutdown Resolution
Since early October, the crypto market has lost approximately $340 billion in capitalization, trailing behind gold and tech stocks. According to George Mandres, senior trader at XBTO Trading, significant holders are reducing their positions, leading to weaker ETF inflows and corporate treasury sales.
In broader markets, MSCI’s Asia ex-Japan index rose by 0.1% in early trading, as the US House of Representatives prepared to vote on a bill to restore federal funding. The bill, already passed by the Senate, aims to conclude the longest US government shutdown in history.
Impact of Economic Data on Crypto Market
In the US, the Dow Jones Industrial Average achieved a record close with a 1.2% overnight rise, while the Nasdaq fell by 0.3%. The S&P 500 futures remained steady during early Asian trading sessions. The limited data available during the shutdown, including an ADP report showing private employers shedding an average of 11,250 jobs weekly, influenced market sentiment.
The muted labor data increased the likelihood of a Federal Reserve rate cut in December. Futures markets now price a 68% chance of a 25-basis-point cut, up from 62% the previous day, according to CME’s FedWatch tool.
The US dollar index fell 0.2% to 99.45, its weakest level this month, reflecting a softer sentiment. Gold extended gains, surging nearly 3% to trade above $4,100 in Asian hours, driven by lower yields and renewed risk appetite in equities.
Crypto Market Awaits ETF Inflows
Bitcoin struggled to align with the broader risk asset movement, trading near $105,000. Analysts suggest that sustained market conviction depends on on-chain accumulation or stronger ETF inflows indicating a demand shift.
As Washington nears a shutdown resolution, traders anticipate reduced volatility across risk assets. However, the crypto market may take longer to recover, with investors remaining cautious after weeks of intense selling and liquidity challenges.
