Bitcoin remained steady around the $91,000 mark on Tuesday, as traders closely monitored developments in Japan’s stock market, which reached new heights, and awaited significant macroeconomic news from the United States to guide the direction of cryptocurrency prices.
In Asia, Japan’s Nikkei Index surged to an unprecedented all-time high, climbing as much as 3.6% to reach 53,814.79. The Topix Index also achieved a record, gaining 2.4% to close at 3,599.31. This uptick in the Japanese stock market followed a public holiday, prompting Tokyo to catch up with Wall Street’s recent bullish momentum. Speculation surrounding Prime Minister Sanae Takaichi’s potential call for an early election further fueled optimism, indicating continued fiscal spending.
The weakening yen, which slipped into the ¥158-to-the-dollar range, contributed to the positive market sentiment, enhancing the earnings potential of export-heavy corporations. Major sectors, including technology and automotive, led the market rally, showcasing broad investor enthusiasm as 209 out of the 225 stocks on the Nikkei reported gains.
Currently, Bitcoin is priced at $91,026, down 0.9%, while other major cryptocurrencies are also seeing declines, with Ether at $3,096 (down 1.6%) and XRP at $2.05 (down 1.8%). The total cryptocurrency market capitalization sits at approximately $3.18 trillion, experiencing a 1.3% drop.
In other regions, markets in Asia opened with modest risk-on sentiment. The Shanghai Composite rose 0.24%, the SZSE Component gained 0.60%, and the Hang Seng increased by 0.14%. However, the China A50 index fell by 0.77%, indicating a cautious stance among larger Chinese companies.
Influencing market dynamics, Wall Street set an optimistic tone with the S&P 500 and Dow reaching record highs on Monday. Traders largely overlooked a Justice Department criminal investigation involving Federal Reserve Chair Jerome Powell, focusing instead on robust performances from technology stocks and retail giants like Walmart.
Despite this optimistic backdrop, uncertainty persists around Powell’s investigation, connecting to claims that the administration threatened him with a criminal indictment related to renovations at the Fed’s headquarters. Powell has suggested that this pressure was intended to accelerate interest rate cuts.
The upcoming US Consumer Price Index (CPI) report, due on January 13, is anticipated to play a significant role in determining future market moves, especially concerning the Federal Reserve’s decisions. The Beige Book is set to be released on January 14, and the Fed’s subsequent policy meeting will occur from January 27 to 28.
Robin Singh, CEO of Koinly, remarked that Bitcoin seems to be at a pivotal moment, predicting a potential consolidation phase for the asset throughout the next few months, despite the imminent vote on the CLARITY Act this week. He noted that Bitcoin’s minimal price movement at the beginning of the year reflects underlying market sentiment that has remained relatively stable.
Singh suggested that anticipated rate cuts by the Federal Reserve could exert some influence on Bitcoin’s price, particularly if such actions occur early in the year, although current market hesitance may not have fully priced in these changes. Bitcoin’s stagnation around the $91,000 level underscores this complex interplay of rate expectations, dollar fluctuations, and the impacts of ETF-driven flows on market dynamics.
Meanwhile, oil prices continue to be a focal point, with crude climbing to a seven-week high as traders monitor unrest in Iran and the potential for supply disruptions, linking geopolitical risks to broader economic stability and market movements.
