Cryptocurrencies reacted sharply to global trade tensions, experiencing a rebound following President Trump’s softened stance on trade tariffs during his speech at the World Economic Forum in Davos. Markets were on high alert for a potential escalation in trade tensions between the U.S. and Europe concerning Greenland, a situation that propelled gold to new heights. In the lead-up to the Davos speech, cryptocurrencies experienced significant losses amid growing anxiety. Despite a rebound in markets triggered by President Trump’s unexpected shift in tone, the momentum was restrained as attention turned to the upcoming PCE-based inflation readings for October and November, set to be released by the U.S. on Thursday morning. Markets are anticipating that both the headline and core year-on-year PCE price inflation will remain steady at 2.8 percent in November, consistent with the figure noted in September. In a similar vein, markets are anticipating that both the headline and core month-on-month PCE price inflation will register at 0.2 percent for November. In September, the headline reading recorded a 0.3 percent increase, while the core component registered a 0.2 percent rise.
Expectations surrounding interest rates from the Fed strongly indicate a pause on January 28. Reports indicates that the probability of a Fed rate cut in the upcoming review stands at a mere 5 percent. Just a day ago, it stood at 4.4 percent. The overall crypto market capitalization stands at $3.04 trillion, reflecting a 0.9 percent increase overnight. In a notable market shift, 58 of the top 100 cryptocurrencies are experiencing overnight gains exceeding one percent. Simultaneously, 6 out of the top 100 cryptocurrencies are experiencing overnight losses exceeding one percent. The inverse correlation between cryptocurrencies and gold persisted on Thursday. Bitcoin experienced a 1 percent increase overnight, while gold futures saw a decline of approximately a quarter percent during the day’s trading session.
Gold Futures set for February delivery are now priced at $4,827.41 per troy ounce, experiencing a decline of 0.21 percent over the last 24 hours. On Wednesday, prices reached an unprecedented peak of $4,890.35. The slight uptick in sentiment within the cryptocurrency market was also evident in the CMC Fear and Greed Index. The index has moved slightly higher within the “fear” territory, rising to 34 from 32 just a day prior. Crypto liquidations have seen a decline from the levels observed the previous day. According to data, crypto liquidations amounted to $587 million, a decrease from $862 million the previous day.
On Wednesday, the crypto markets experienced significant outflows from Bitcoin and Ethereum Spot ETF products in the U.S. Bitcoin Spot ETF products in the U.S. experienced a surge in outflows, rising to $709 million from $480 million on Tuesday. The iShares Bitcoin Trust ETF experienced significant outflows amounting to $357 million, while the Fidelity Wise Origin Bitcoin Fund saw outflows of $288 million. On Wednesday, Ethereum Spot ETF products in the U.S. experienced net outflows totaling $287 million, compared to $230 million on Tuesday. Bitcoin has surged nearly 1 percent over the last 24 hours, currently trading at $89,961.09, while Ethereum is trading at $2,982.97, with broader movements seen across BNB, XRP, Solana, TRON, Dogecoin, Cardano, Canton, Sky, Dash, and Midnight, reflecting mixed performance across the top 100 cryptocurrencies.