Crypto Market

BTC and ETH Market Insight

Past week's performance reflects continued adjustment and evolution in cryptocurrency market. Bitcoin (BTC) fluctuated within $83,862 and $93,856, a 12.5% range that translated into a gain of more than 9% from the weekly low as of today. This mirrored broader market movement, with the total market capitalization oscillated between $2.9T and $3.05T. That said, the market reacted sharply to the BOJ signals of potential rate hike, triggering steep pullback in BTC and most altcoins. That shake wiped out around $1.5 billion in leveraged positions—predominantly longs.

The Relative Strength Index (RSI) started to claw back from Oversold territory to Average level last week, a clear sign of a recovering market. Credit goes to a string of pivotal events acting as positive catalysts, including the end of QT on Dec 1,  Ethereum’s Fusaka upgrade, and core PCE inflation landing at expected 2.8% YoY mark.

The upcoming central bank moves could dictate crypto's year-end trajectory and solidify its annual performance. The FOMC on Dec 9-10 and the BOJ meeting on Dec 18-19 are equally critical for all traders across instruments and markets. Right now, there's an 85% shot at a 25 basis point Fed cut, dialing the target range down to 3.50%-3.75%—a tailwind for risk assets like crypto, thanks to a softer dollar and dipping yields. On the flip side, odds sit at 80% for a BOJ hike to 0.75%, finally ditching decades of negative rates. That could spark some real tension, pitting U.S. easing against yen-tightening jitters.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

The week commenced on a risk-off note, with Bitcoin spot prices retreating from ~$91.8K to intraday lows near $83.8K early in the period, followed by a solid rebound to ~$94K mid-week, before settling around $89K at close. Ethereum mirrored this volatility closely. Implied volatility (IV) contracted after the early-week panic, with BTC's 1-week ATM IV easing to 47%,and ETH's to 68%. Friday's downtick drove realized volatility (RV) higher, prompting a modest uptick in front-end IV. Put skew remained biased toward puts but eased slightly overall. While underlying fundamentals held firm, liquidity constraints emerged as the key driver of the persistent elevated volatility.

Altcoins and Blockchain News

Macro

The major benchmarks finished higher for the first week of December: the DJIA added +0.5%, the S&P 500 rose +0.3%, and the Nasdaq +0.9%. The Chinese also finished a strong week: the Shanghai Composite Index added +0.37%, the CSI 300 +1.28% and the Hang Seng index +0.87%.