Crypto Market Slumps Amid Bitcoin Weakness Despite Global Equities Rally
The total cryptocurrency market capitalization fell by 1.4% to $2.97 trillion, with Bitcoin trading around $86,900 after failing to sustain levels above $90,000 for the third time. Ether dipped about 1.5% to approximately $2,927, while Solana dropped nearly 3%, and XRP declined around 2%.
Crypto investment products experienced $952 million in outflows last week, with Bitcoin funds down $460 million and Ethereum funds falling by $555 million. However, XRP and Solana funds saw inflows of $63 million and $49 million respectively.
In contrast to crypto's decline, global equities soared to new records. The MSCI All Country World Index rose for the fifth consecutive session, with a year-to-date gain near 21%. Asian equities advanced 0.2%, led by technology stocks. The S&P 500 reached an all-time high, although trading volumes were thin ahead of Christmas. European futures remained muted.
According to FxPro chief market analyst Alex Kuptsikevich, there is heavier seller control in the crypto markets and rebounds are failing to sustain momentum. Larger players seem to be leaning bearish with measured selling, leaving cryptocurrencies distant from their recent highs.
Bitcoin briefly traded above $90,000 earlier in the week but was sold off as gold rallied and the dollar weakened, reflecting a reassessment of risk appetite and a shift toward risk-off dynamics.
Looking ahead, more pronounced declines in cryptocurrencies are expected, alongside a spread of risk aversion to stocks and currencies in developing countries.
