Global markets began the week in a state of watchful anticipation, with all eyes fixed firmly on the upcoming Federal Reserve meeting. While cryptocurrency prices extended a recent rebound on expectations of monetary easing, Asian equity markets presented a mixed picture, reflecting local uncertainties and the overarching caution before the central bank’s decision.
Cryptocurrencies Find Footing on Fed Hopes
Digital assets led the risk-on sentiment at the start of the week. Bitcoin, the market bellwether, traded firmly above $91,300 and briefly reclaimed the $92,000 level, marking a 2% gain over 24 hours and extending its weekly rebound to more than 6%. This upward move was mirrored across the major altcoins, with Ethereum gaining 3% to trade near $3,135 and XRP rising over 1%.
The primary catalyst was the market’s overwhelming conviction that the Fed would deliver a 25-basis-point interest rate cut at its final meeting of the year. This anticipation fostered a “risk-on” environment, boosting assets like cryptocurrencies that are sensitive to liquidity expectations. Underlying this move was a significant resurgence of institutional interest. Crypto investment funds recorded a second consecutive week of inflows, totaling $716 million, with Bitcoin products alone attracting $352 million. Analysts noted that this, combined with oversold technical indicators, suggested the heavy selling pressure from November may be easing.
A Fragmented Picture in Asian Equities
In stark contrast to the unified rally in crypto, Asian stock markets opened with little clear direction. The MSCI Asia-Pacific ex-Japan index edged slightly lower by about 0.1%, highlighting the region’s lack of a unified trend. Instead, performance was dictated by a patchwork of local headlines and data.
China’s Shanghai Composite was a relative bright spot, supported by stronger-than-expected November export figures. Conversely, Japan’s Nikkei 225 struggled, weighed down by a confirmed economic contraction and escalating diplomatic tensions with China involving military aircraft. Elsewhere, markets in South Korea and Australia showed subdued movements as traders globally adopted a wait-and-see approach. This collective hesitation stemmed not from doubt about a December rate cut but from intense uncertainty over the Fed’s policy guidance for 2026, alongside concerns about the sustainability of the year’s AI-driven stock rally.
A Market Awaiting Guidance
The divergent moves underscore a market in transition, balancing optimism over imminent monetary support against longer-term economic questions. For cryptocurrency traders, the rally’s durability hinges on the Fed meeting outcomes; a dovish signal could fuel a year-end “Santa rally”, while hawkish guidance could swiftly reverse recent gains. The market has absorbed a significant correction and now appears to be stabilizing, but the path forward remains highly dependent on central bank communication and subsequent liquidity conditions.
The next verified milestone for all risk assets is the Federal Reserve’s interest rate decision and, crucially, the tone set by Chair Jerome Powell. His remarks will provide the clarity markets need to either confirm the current cautious recovery or trigger a reassessment of risk appetites for the year’s final weeks.
