Crypto markets continued to fall on Monday after a stronger-than-expected U.S. jobs report dampened hopes for early interest rate cuts from the Federal Reserve. The latest data revealed that job growth is still robust in the United States and accelerated in December, pushing up Treasury yields.
Although the crypto market faces some macroeconomic headwinds, the long-term outlook remains positive. Where the combination of favorable regulatory changes, increased institutional adoption, and potential bitcoin demand shocks will act as positive catalysts.
Given the positive outlook during Trump's term, coupled with his personal support for cryptocurrencies, and a Republican-majority Congress, we are optimistic about the long-term potential of crypto assets.
In the short term, strong volatility is expected, with several important macroeconomic data being released, including the Consumer Price Index (CPI) and Producer Price Index (PPI) for December.
Bitcoin is still fighting to maintain $90,000 in this new week of strong volatility triggers.
The VIX Index (also known as the Volatility Index) measures the expected implied volatility of the US stock market and is used as a barometer to assess how fearful and uncertain the markets are, and started today with a strong rise.
Yields on the 10-year Treasury rose to 4.80% on Monday, the highest level since November 2023. Yields on the 30-year Treasury also rose, approaching 5% after breaking through that level on Friday for the first time in more than a year. We’re still treating the DXY as a structural performer until it isn’t. Risk assets will likely continue to struggle until the dollar gives way, with the DXY as high as 110.16 as of 6 a.m. ET.
Opera summary: The expectation is still for turbulence in the short term.
