PANews reported on January 14 that Singapore crypto investment institution QCP Capital published an article today saying that the global market has digested the readjustment of the Fed's interest rate cut expectations. The 10-year Treasury yield soared to 4.8%, the highest since the end of 2023, and the market currently expects no interest rate cut until October. Stock futures opened down 1.5%, causing Bitcoin to fall below $90,000, and then steadily recovered to above $95,000.
What's next? Key PPI and CPI data are due out soon. We believe potential upside surprises could emerge as markets begin to adjust to the reality of a prolonged high interest rate environment, with some even beginning to consider the possibility of rate hikes. The momentum of rising yields could test the resilience of financial markets. In the crypto space, caution is evident in BTC options flows, with puts pushed below the critical $90,000 support level. Short-term volatility and option spreads remain elevated, while the VIX remains elevated at 18.68, suggesting volatility could persist into January.
However, the market is still expected to receive a catalyst. Reports that Trump may sign an executive order on his first day in office to address "de-banking" and repeal a controversial cryptocurrency accounting policy may provide a boost to the market.