Asian Market Open: Bitcoin Price Falls Below $108,000 as Investors Hope for Further Lower Interest Rates.

Bitcoin price fell below $108,000 with the start of the Asian trading session on Monday, contradicting the “month of optimism” scenario associated with October and reinforcing the risk rebalancing strategy that gained momentum late last week.

Traders pointed to declining confidence in the accelerating pace of monetary easing (lower interest rates) and improving U.S. dollar (USD) strength as immediate catalysts for the decline, so caution remained the dominant situation following recent statements by Federal Reserve officials indicating a slowdown in monetary policy easing.

An overview of the market

• Bitcoin: $107,734, down 2.1%
• Ethereum (Ethereum-ETH): down 3.8% to $3,737
• Ripple (XRP): $2.43, down 3.1%
• Total cryptocurrency market capitalization: $3.69 trillion, down 3.1%

Limited trading activity during the holidays and reduced use of leverage are adding pressure to crypto markets.

Asian stocks opened with a mixed performance tilted higher, supported by profits from technology companies that focused on increasing investment in the artificial intelligence sector. However, cryptocurrency markets remained under pressure, reflecting a more selective appetite for risk, while liquidity remained below normal with the Tokyo Stock Exchange closed for the holiday, increasing daily volatility at the start of trading hours in Asia, according to trading desks.

Position financing and arbitrage also played a role, with excessive leverage in October helping to keep bullish trades vulnerable. As prices fell, the wave of forced liquidations pushed down price levels in spot markets, traders said.

General mood in crypto markets changes after Federal Reserve Chairman’s reservations about December interest rate cut

Last month’s close ended the series of “bullish October” rallies, in what crypto circles described as “red October,” a change in mood that paved the way for weakness in November.

These monetary policy expectations have remained the main talking point regarding macroeconomic factors, but after last week’s meeting, Federal Reserve Chairman Jerome Powell made clear that a rate cut at the next meeting in December “is not a foregone conclusion,” a phrase that dampened traders’ optimism about looser monetary policy.

Thus, expectations of an imminent and repeated rate cut were shaken after Powell’s press conference and then stabilized, leaving crypto markets vulnerable to the effects of daily data in the absence of clear macroeconomic policy direction.

Traders await torrent of US data as crypto markets explore their new direction

Attention is currently turning to a slew of U.S. data, with JOLTS employment data due tomorrow, ADP private sector payrolls data on Wednesday, weekly jobless claims on Thursday and the University of Michigan inflation forecast report due on Friday. Strong labor market indicators are likely to support the view that no urgent rate cuts are expected, while weak figures could revive hopes for monetary policy easing.

The asset indicators of the different sectors remained contrasted. While local stocks attempted to ride the positivity from last week’s moves, crypto markets did not benefit from this optimism, which may be due to the decline in the use of leverage and the wait-and-see attitude traders prefer regarding the timing of new macro policy measures.

Riya Sehgal, research analyst at Delta, said: “In general, markets are experiencing a good phase of reduction in the use of financial leverage. Although long-term investors are rushing to take moderate profits, the realized market capitalization of Bitcoin (Bitcoin) surpassing the $1.1 trillion level and the stabilization of trading activities on the blockchain indicate lasting structural strength as we approach the month of November, which has historically been a ‘positive’ month.

Although traders noted that US-China news headlines remained largely in line with expectations, they did not have a clear impact on digital assets. Instead, the market focused on interest rates, US dollar strength and balancing trade positions, and the positive structural outlook highlighted the resilience of cryptocurrencies and the favorable seasonal backdrop that often accompanies the month of November.

After Asian Market Open: Bitcoin Price Falls Below $108,000 as Investors’ Hopes for Further Cut in Interest Rates appeared first on Cryptonews Arabic.