Good morning, Asia. Here’s what’s making news in the markets:
Welcome to the Asia Morning Briefing, a daily overview of top stories in US hours and an overview of market movements and analysis. For a detailed overview of US markets, see CoinDesk’s Crypto Diary Americas.
Bitcoin is hovering around 90k after a weekend of sharp but short-lived swings that revealed just how thin year-end liquidity has become.
In a recent note, QCP writes that perp open interest in both BTC and ETH has fallen by nearly half 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 January break, signaling investors expect 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 from the rate decision itself.
“The Fed’s interest rate cut may be the headline, but the more important shift is the widening gap in policy signals across the major central banks. The BOE is divided, the ECB is holding firm and the BOJ is preparing to tighten at levels last seen in 2007, all against a backdrop of rising friction across key Asian economies in Singapore and Singapore,” said Gracie Linsk, OK managing director. interview.
Lin added that the recent clearing of leveraged positions has improved market structure by removing crowded trades, giving prices room to move without forced flows. With that reset, she said bitcoin was able to push back towards 91k as global capital adjusts to an uneven set of macro signals.
All of this sets the stage for a market where the direction will depend on how traders interpret the Fed’s guidance and the broader policy divide rather than the move in interest rates that everyone has already priced in.
Market movement:
BTC: Bitcoin edged toward $90,000 on Monday after early U.S. trade erased a brief weekend rally, leaving the market stuck in a narrow range as rising bond yields and softer stocks pressured risk assets.
ETH: Ether edged slightly lower alongside the broader market, but continued to outperform on a relative basis, briefly hitting its strongest level against bitcoin in more than a month.
Gold: Gold fell slightly on Monday as traders remained cautious ahead of the Fed’s policy meeting, with markets pricing in a high likelihood of a rate cut and awaiting guidance from Powell on future moves.
Nikkei 225: Asia-Pacific shares fell on Tuesday, following Wall Street’s decline, as investors remained cautious ahead of a widely expected 25 bp Fed rate cut and awaited guidance on the central bank’s next move.
Elsewhere in Crypto:
- 40% of Canadian crypto users flagged for risk of tax evasion, Canadian tax authorities reveal (CoinDesk)
- Ondo Finance Says Biden-Era SEC Probe Closed Without Charges (Decrypt)
