Key facts
- Bitcoin recovered from lows around $63,065 to trade near $63,500.
- Nasdaq futures declined, reaching their lowest point since May.
- South Korea's Kospi index saw a 10% drop.
- Bitcoin's price increased towards $92,000 in early Asian trading.
- Regional stock markets, including Japan's Nikkei 225, showed signs of recovery.
- Improved market sentiment is linked to the Fed's quantitative tightening actions and liquidity injections.
Bitcoin has shown resilience, recovering from earlier lows in the Asian trading session despite a broader risk-off sentiment affecting equity markets. The cryptocurrency traded around $63,500, up from an earlier low of $63,065, though still down for the day and week. This recovery occurred as Nasdaq futures experienced declines, hitting their lowest point since May, with significant drops seen in tech stocks like NVDA. The South Korean Kospi index also tanked by 10%, alongside more moderate losses in other regional markets such as Japan's Nikkei.
Earlier in the week, Bitcoin had surged towards $92,000 as regional stocks steadied, following a brief period of selling pressure in global bonds and cryptocurrencies. This rebound was supported by a return of risk appetite in equities and improved market sentiment attributed to the Federal Reserve ending quantitative tightening and injecting liquidity. A decrease in Bitcoin exchange reserves to multiyear lows also contributed to buying pressure.
The market experienced turmoil earlier in the week, with expectations of a Bank of Japan tightening triggering a global bond selloff and amplifying declines in cryptocurrencies. However, attention has shifted back to the Federal Reserve, with markets anticipating a rate cut in December. Recent economic data has suggested a cooling economy, reinforcing expectations for a policy easing. US stocks have seen gains, driven by technology shares, despite earlier selloffs linked to softer manufacturing data and rising Treasury yields.
Looking ahead, the Personal Consumption Expenditures Index on Friday will be a key test for inflation expectations, potentially solidifying the case for a Fed rate cut. Meanwhile, markets are also observing the selection process for the next Federal Reserve Chair, with President Donald Trump expected to announce his choice early next year.
