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As the surge in international oil prices subsided and the U.S. stock market rebounded after five trading days, risk appetite revived in the cryptocurrency market. However, with the increased likelihood of a Federal Reserve (Fed) interest rate hike next week, whether the upward trend will continue depends on U.S. Treasury yields and the direction of monetary policy.
According to CoinMarketCap, a cryptocurrency market data aggregator, as of 8 AM KST on September 12, the total cryptocurrency market capitalization increased by 0.49% from 24 hours ago to $2.63 trillion. Bitcoin (BTC) rose by 0.40% to $77,112.27, while Ethereum (ETH) jumped by 2.72% to $2,510.44, leading the market's ascent. BNB rose by 1.68% to $723.94, and Solana (SOL) increased by 2.48% to $101.81. XRP (Ripple) gained 0.39% to $1.34. The Fear & Greed Index stood at 68, indicating a 'Greed' sentiment.
The backdrop for the bullish market included falling international oil prices and a rebound in the U.S. stock market. On the 11th (local time), the Dow Jones Industrial Average rose by 0.98%, the S&P 500 Index by 0.86%, and the Nasdaq Composite Index by 0.96%, respectively. Brent crude for November delivery, which had surged recently due to Middle East tensions, closed down 2.81% at $104.61 per barrel, and West Texas Intermediate (WTI) crude for October delivery fell 2.37% to $100.05 per barrel. The possibility of an interim agreement regarding shipping in the Strait of Hormuz was mentioned, partially easing pressure on risk assets caused by rising oil prices.
The fact that the U.S. August Consumer Price Index (CPI) did not deviate significantly from market expectations also supported investor sentiment. CPI rose by 0.4% month-over-month and 3.4% year-over-year, meeting expectations. Core CPI, excluding energy and food, increased by 0.3% month-over-month, slightly exceeding the forecast of 0.2%. Previously, ETH led the market with a strong rally and short squeeze (buying pressure to close or cover short positions) after the CPI announcement, and it continues to maintain a higher 24-hour gain than Bitcoin.
In the derivatives market, the liquidation of leveraged positions continued. According to CoinMarketCap data, the total liquidation volume was $957.34 million, with long position liquidations amounting to $585.47 million and short position liquidations to $371.86 million. Open interest increased by 11.75% to $473.32 billion, and trading volume rose by 30.7% to $980.04 billion. As derivatives market trading rapidly expanded with the price rebound, attention should also be paid to future volatility.
The key variable for the market moving forward is the Federal Reserve's Federal Open Market Committee (FOMC) meeting next week. According to the CME FedWatch Tool, the probability of the Fed raising the benchmark interest rate by 0.25 percentage points increased from 72.4% the previous day to 86.3%. The U.S. 10-year Treasury yield also surged to the 4.99% range intraday immediately after the CPI announcement, nearing 5%, before falling back to the low-to-mid 4.9% range. While falling oil prices and a rebound in the U.S. stock market are favorable for the cryptocurrency market in the short term, the atmosphere of an impending interest rate hike and high Treasury yields remain variables that could limit further upside for risk assets.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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