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Dogecoin (DOGE) experienced a 6% drop to an intraday low of $0.3404 on December 19, following Bitcoin's decline below $100,000 and a hawkish Federal Reserve press conference. The memecoin market saw over $10 billion wiped out in 24 hours, with increased trading volume reflecting heightened risk-off sentiment. Despite current bearish trends, professional trader Natalie Dormer notes that DOGE is at a critical support level around $0.35, suggesting potential for a rebound if broader market conditions stabilize.
Major developments in the crypto space include the launch of Ripple's RLUSD stablecoin, hailed as a "game changer" for cross-border payments by industry veterans. Meanwhile, Toncoin saw an 80% surge in whale activity amid a $405 million market sell-off, while Bitcoin retraced to $102,257 after hitting a record high. Additionally, Binance announced the delisting of three assets—Kaon (AKRO), Bluzelle (BLZ), and WazirX (WRX)—effective December 25, 2024, due to compliance with its standards.
Kostovetsky warns that investing in cryptocurrency resembles gambling more than traditional investments, highlighting its volatility and the need for risk tolerance. While Trump’s administration may foster crypto adoption through regulatory clarity, the SEC's stance on cryptocurrencies as securities complicates the landscape. The Federal Reserve's refusal to hold a bitcoin reserve further underscores the challenges in establishing a stable framework for digital currencies.
The Federal Reserve's recent hawkish stance led to significant market turbulence, negatively impacting risky assets like stocks and cryptocurrencies while boosting the U.S. dollar and bond yields. Following a 25 basis point rate cut, the Fed indicated a slower easing pace, with only one anticipated rate cut in 2025, prompting a market recalibration towards higher rates and increased volatility. As a result, equity indices fell, and there was heavy selling in tech stocks and cryptocurrencies.
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Avalanche (AVAX) and Chainlink (LINK) faced significant losses following the Federal Open Market Committee's interest rate cut announcement, with AVAX dropping 16% and trading around $42.35. Analysts project AVAX could reach $60 by year-end in a bullish scenario, while Chainlink shows strong support at $23 despite whale activity raising liquidity concerns. Both assets exhibit potential for recovery, with Avalanche's ecosystem expansion and Chainlink's bullish reversal patterns suggesting possible upward momentum.
The US Federal Reserve cut its benchmark interest rate by 0.25% to a range of 4.25% to 4.50%, marking the third consecutive reduction since September. While inflation remains above the 2% target, the Fed anticipates only two more rate cuts in 2025, reflecting a cautious approach amid ongoing economic growth.Additionally, the Fed adjusted its inflation forecast to 2.5% for 2025 and lowered the Reverse Repurchase Agreement rate to 4.25%. The stock market reacted negatively to the Fed's outlook, with significant declines in major indices following the announcement.
As 2025 approaches, Ethereum and Solana are in fierce competition, with Solana recently outperforming Ethereum in application income and decentralized exchange volume. However, Bitwise CIO Matt Hougan predicts Ethereum will surpass Solana due to its expanding ecosystem and institutional interest, bolstered by upcoming upgrades and Layer-2 solutions. While Solana's rapid transaction speeds and low costs attract users, Ethereum's institutional capital inflows and anticipated performance enhancements position it favorably for future growth.
UBS strategists predict minimal change in the U.S. fiscal deficit under a second Trump administration, despite proposed tax cuts and spending programs. With the deficit exceeding 7.5% of GDP and a debt-to-GDP ratio over 120%, significant fiscal constraints are anticipated, including potential entitlement reforms and tax increases to stabilize debt levels. The challenges of high interest rates and narrow congressional majorities may further complicate expansive fiscal policies.
UBS strategists predict minimal change in the U.S. fiscal deficit under a second Trump administration, despite proposed tax cuts and spending programs. With the deficit exceeding 7.5% of GDP and a debt-to-GDP ratio over 120%, significant fiscal constraints are expected, limiting expansive policies. Achieving long-term debt sustainability will likely require structural reforms, higher growth, and potential tax increases.
UBS strategists predict minimal change in the U.S. fiscal deficit under a second Trump administration, despite proposed tax cuts and spending programs. With the deficit exceeding 7.5% of GDP and a debt-to-GDP ratio over 120%, significant fiscal constraints are anticipated, including potential entitlement reforms and tax increases to stabilize the economy. The challenges of high interest rates and narrow congressional majorities may further complicate expansive fiscal policies.
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