Welcome to the weekly UpCrypto Trading Newsletter.
What does week 52 bring?
Monday, December 23:
Consumer Confidence Index đź“Š
Consumer confidence is expected at 113, signaling robust optimism among consumers heading into the holiday season. Strong confidence levels often correlate with increased spending and support for economic growth.
Tuesday, December 24:
Durable Goods Orders 🏗️
A decline of -0.4% is expected, reflecting potential softening in business investments. This data is a crucial indicator of future manufacturing activity.New Home Sales đźŹ
Sales are forecasted at 0.65 million units. A stable or improving figure would signal resilience in the housing market despite elevated mortgage rates.
Wednesday, December 25:
Christmas 🎄
Markets are closed as investors and traders enjoy the holiday break.
Thursday, December 26:
Initial Jobless Claims 📉
Claims are expected to come in at 218K, a closely watched figure amidst Federal Reserve policy shifts. Any unexpected increase could hint at emerging economic pressures.
Friday, December 27:
Advanced Wholesale Inventories 📦
A 0.3% increase is anticipated, signaling how businesses are managing stock levels. This data offers insights into supply chain dynamics and economic activity.
Weekly Market Wrap before the Outlook
The Federal Reserve plays Grinch on rate cuts for 2025
At its final meeting of 2024, the Federal Reserve delivered a cautious outlook, surprising markets with a more hawkish stance. The key highlights included:
A 0.25% rate cut, bringing the fed funds rate to 4.25%-4.5%, but signaling only two rate cuts in 2025 versus four in prior projections.
Inflation remains above the Fed’s 2.0% target, and uncertainties around tariff policies add to cautious sentiment.
Chair Powell emphasized that the U.S. economy remains strong and in “a really good place.”.
Our Take: While the Fed’s cautious approach is justified by persistent inflation and policy uncertainties, the overall trajectory for rates is downward. This supports borrowing costs and consumption, maintaining a positive backdrop for markets.
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Crypto and Market Outlook for Week 52
Economic Data
The week ahead brings important economic data, including consumer confidence, durable goods orders, and initial jobless claims. Investors will also monitor housing data, especially new home sales, as a gauge of market health amid high borrowing costs.
Crypto Market and Fed Policy
Bitcoin has shown signs of stabilization after dropping to $92K, mirroring movements in traditional markets following the FOMC. The FED's hawkish tone, signaling only two rate cuts in 2025 alongside a revised inflation forecast of 2.5%, initially unsettled both traditional and crypto markets. This adjustment reduced expectations for aggressive monetary easing, leading to immediate declines across risk assets, including Bitcoin.
Thursday’s stronger-than-expected GDP growth of 3.1% and lower-than-forecast jobless claims reinforced the FED's cautious stance. The data highlighted a robust U.S. economy, countering market hopes for more substantial rate cuts. Bitcoin’s reaction underlines the market’s sensitivity to macroeconomic conditions, where weaker economic signals are often preferred to justify looser monetary policies.
In the broader crypto market, TOTAL2, representing altcoins excluding Bitcoin, has rallied 10% from our key buy zone after a 24% correction. The reason for a sudden rise up were the PCE numbers, they provided a strong start, easing concerns and supporting a more optimistic outlook and countering Powell’s outlook.
Traders are advised to remain cautious, avoiding FOMO and prioritizing long-term positioning. With several liquidation events in recent days, the crypto market is likely to undergo solid retests before forming a stable macro bottom. For now, Bitcoin's return to the high 90s range signals a tentative recovery, but patience remains key as the market digests evolving macroeconomic conditions.
Seasonal Market Trends
As we approach the end of the year, markets typically experience lighter trading volumes and positive seasonal trends. However, caution is warranted as unexpected economic data or hawkish Fed commentary could disrupt this stability.
Conclusion
Week 52 offers a mix of economic and market-moving events. Consumer confidence and jobless claims will be key indicators to watch. For crypto enthusiasts, Bitcoin’s resilience amidst macroeconomic headwinds remains a highlight. As we approach 2025, investors are advised to stay diversified and prepared for potential market fluctuations. Stay tuned for updates and insights throughout the week.
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Here’s to a successful week! Stay tuned for more weekly outlooks on the crypto and financial markets. We wish you a Merry Christmas and will keep you updated over the holidays. Take some time to relax and enjoy the festive days with your loved ones. Happy Holidays from all of us!
Best regards,
your UpCrypto Team!
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