The cryptocurrency market appears to be stalling despite a robust rally in global equity markets, highlighting a cautious sentiment among traders. As major digital assets struggle to maintain upward momentum, investors are closely monitoring upcoming key U.S. inflation data, which could significantly influence risk appetite across various asset classes.
Global markets began the week with optimism, bolstered by a rally in Asian equities that lifted world indices to new record highs. Notably, the MSCI World Index climbed 0.2% to reach 893.88, propelled by a nearly 1% gain in Japan’s Nikkei and slight increases in China’s CSI300 and Shanghai Composite.
This surge comes amid high-stakes trade discussions between the U.S. and China in London, focusing on critical minerals. While hope for trade progress could sustain market performance, uncertainties surrounding macroeconomic policies remain a significant concern.
In contrast to the positive trajectory of traditional markets, crypto derivatives are reflecting a more cautious reality. According to Coinglass, Bitcoin’s Open Interest (OI) has declined from over $120 billion in late May to just above $100 billion, signaling diminished trader confidence.
This reduction in Futures Volume and OI indicates that fewer traders are placing leveraged bets on price movements. Additionally, a recent liquidation heatmap highlights $21.75 million in BTC liquidations, with Ethereum seeing an even higher figure of $35.63 million, suggesting more volatile positioning in altcoins like Solana and Ripple.
Looking ahead, the upcoming week features essential market-moving events, with U.S. inflation data anticipated to be a significant trigger for market volatility. The Consumer Price Index (CPI) report is scheduled for June 11, followed by the Producer Price Index (PPI) on June 12.
Traders are preparing for potential turbulence, particularly if inflation data exceeds expectations. Other pivotal events include the U.S.-China trade meeting, discussions on DeFi regulations, and the SEC’s decision on the Bitwise DOGE ETF.
This hesitation in the crypto market implies that investors are bracing for potential impacts as these events unfold. Samyukhtha L KM, a keen observer of the dynamic digital asset landscape, holds a Bachelor’s in Commerce and a Master’s in Journalism and Mass Communication.
Her curiosity about blockchain’s future drives her analysis amidst traditional finance’s prevailing influence.