Key Insights:
- It was a mixed Friday session for the crypto top ten, with ETH bucking a bullish trend.
- Softer US inflation numbers and the NASDAQ Index delivered support while regulatory chatter capped the upside.
- The crypto market cap rose by $4.89 billion to end the day at $1,006 billion.
It was a mixed session for the crypto top ten on Friday. ADA led the way while ETH saw red. Notably, BTC wrapped up the day at $23,000 for the third consecutive session.
US economic indicators delivered further evidence of the Fed-Effect on the US economy. Personal spending fell by 0.2% in December, following a 0.1% decline in November, while personal income rose by 0.2%.
The Michigan Consumer Sentiment Index rose from 59.7 to 64.9, up from a prelim 64.6, while the Inflation Expectations component fell from 4.4% to 3.9%, down from a prelim 4.0%.
Inflation figures were market-friendly, with the Core PCE Price Index increasing by 4.4% year-over-year in December versus 4.7% in November.
While the numbers were good enough to cement a 25-basis point Fed interest rate hike next Wednesday, the pickup in consumer sentiment and modest fall in personal spending raised the hope of a soft landing.
According to the FedWatchTool, the probability of a 25-basis point interest rate hike stood at 99.2% this morning versus 58.7% one month ago. One week ago, the chances of a 25-basis point interest rate hike stood at 99.3%.
On Friday, the NASDAQ Composite Index increased by 0.95% to extend its weekly winning streak to four weeks.
Regulatory Chatter Tests Crypto Investor Appetite
From the crypto market, regulatory chatter was the main drag. On Friday, the White House Administration called for increased efforts in regulating cryptocurrencies in a statement, saying,
“Congress, too, needs to step up its efforts. For example, Congress should expand regulators’ powers to prevent misuses of customers’ assets – which hurt investors and distort prices – and to mitigate conflict of interest.”
The statement added,
“In the past year, traditional financial institutions’ limited exposure to cryptocurrencies has prevented turmoil in cryptocurrencies from infecting the broader financial system. It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.”
The SEC was also in the news, with Reuters reporting that the Securities and Exchange Commission is exploring whether registered investment advisers are adhering to rules relating to the custody of client crypto assets. Reportedly, the SEC has stepped up its efforts since the collapse of FTX.
Things were no different across the pond, with the UK Treasury Committee releasing a publication highlighting that 85% of crypto firms failed to meet minimum standards, according to the Financial Conduct Authority (FCA).
Harriet Baldwin MP, Chair of the Treasury Committee, said,
“We are in the middle of an inquiry into crypto regulation, and these statistics have not disabused us of the impression that parts of this industry are a Wild West.”
The Day Ahead
Today, investors should continue to monitor the crypto news wires. FTX and Genesis bankruptcy proceedings and crypto regulatory chatter will need consideration.
Crypto Market Finds NASDAQ Support on Softer US Inflation
It was a choppy Friday session. A bearish start to the day saw the crypto market cap slide to an early low of $978.09 billion. However, investors responded to softer US inflation figures, with the crypto market cap rising to a late high of $1,022 billion before easing back.
Despite the pullback, the crypto market cap ended the session at $1,006 billion, marking a $4.89 billion gain for the day.
The Crypto Market Movers and Shakers from the Top Ten and Beyond
It was a mixed session for the crypto top ten.
ADA rose by 2.63% to lead the way, with BNB (+1.08%) finding strong support.
However, BTC (+0.27%), DOGE (+0.69%), SOL (+0.33%), and XRP (+0.75%) trailed the front runners, while ETH (-0.18%) saw red.
From the CoinMarketCap top 100, it was a mixed session.
Avalanche (AVAX) rallied by 17.16% to lead the way, with trust wallet token (TWT) and curve DAO token (CRV) seeing gains of 13.08% and 7.81%, respectively.
However, threshold (T) slid by 9.74%, with axie infinity (AXS) and flow (FLOW) seeing losses of 2.86% and 2.16%, respectively. Crypto market front-runner aptos (APT) fell for a second consecutive session.
24-Hour Liquidations Remained at Below-Normal Levels
Over 24 hours, crypto liquidations remained at below-normal levels in a choppy Friday session. Long positions saw a marginally higher share of liquidations, accounting for 50.77% of total liquidations. At the time of writing, 24-hour liquidations stood at $110.08 million versus $112.58 million on Friday morning.
Liquidated traders over the last 24 hours were also lower. At the time of writing, liquidated traders stood at 30,628 versus 37,036 on Friday morning. Crypto liquidations were lower over 12 and four hours while higher over one hour.
According to Coinglass, 12-hour liquidations stood at $58.03 million, down from $63.81 million on Friday, with four-hour liquidations down from $37.30 million to $32.95 million. However, one-hour liquidations increased from $0.681 million to $2.33 million.
The chart below shows market conditions throughout the session.
