Published on: 21 Dec 2023Last edit: Jan 05
Week 1, 2024 - Weekly Market Outlook
The weekly market outlook article provides a brief analysis of the past week's market performance and an outlook for the upcoming week.
Introduction
In this weekly market outlook, we examine the most recent updates in the cryptocurrency ecosystem. With an emphasis on Bitcoin and the macro environment, we analyze recent price action. We evaluate the global cryptocurency market cap, DeFi stablecoin flow and do a short review of the crypto market's biggest gainers and losers. Finally, we evaluate the performance of the Flagship Portfolio Vault.
Macro
In December 2023, U.S. consumer confidence reached a five-month high, reflecting increased optimism about business conditions and the labor market. This rise in confidence, evident across various demographics, is expected to support the economy in the upcoming year. Factors such as rising stock markets, declining mortgage rates, and lower gasoline prices contributed to this positive shift. Despite ongoing concerns about inflation, consumers showed an increased intention to make significant purchases and go on vacations. The labor market also showed resilience, with the unemployment rate dropping and consumer spending intentions rising. This overall improvement in consumer sentiment and economic indicators suggests a potential avoidance of recession and a positive outlook for 2024.
The recent increase in U.S. consumer confidence to a five-month high, coupled with a slight gain in home sales, indicates a positive shift in economic sentiment. This uplift, driven by optimism about current and future business conditions and a resilient labor market, could support the economy in the coming year. For risk assets, this renewed consumer confidence and spending intentions suggest a potentially favorable environment. The anticipation of rate cuts by the Federal Reserve in 2024, as reflected in the decline of mortgage rates and inflation expectations, may further bolster market optimism, potentially leading to increased investment and higher valuations in risk asset markets.
Bitcoin
Bitcoin's market movements this week were characterized by relative stability in its range, with the price exceeding $46,000. With the window for the ETF approvals in the final stages, the excitement seems to continue to build up and be priced in.
The recent report from the U.S. Labor Department reveals a significant shift in the American job market as of November 2024. Job openings have decreased to nearly a three-year low, marking a gradual cooling of the labor market. This trend could signal the Federal Reserve's move to start reducing interest rates within the year. The impact of this shift is evident in the behavior of American workers. The number of people quitting their jobs, often for better-paying opportunities, has dropped to its lowest since February 2021. This decline in job-hopping suggests that wage growth might slow down, potentially easing inflation pressures.
Despite these changes, the labor market remains robust. For every unemployed person, there are still 1.4 job openings, and layoffs have reached their lowest level since December 2022. Financial markets anticipate that the U.S. central bank might begin rate cuts as early as March, a move supported by LPL Financial's chief economist, Jeffrey Roach.The Job Openings and Labor Turnover Survey (JOLTS) from the Labor Department indicates a slight decrease in job openings, with the total number falling to 8.790 million by the end of November, the lowest since March 2021. This decline follows a series of rate hikes by the Fed, totaling 525 basis points.
Investors are closely watching these trends, as evidenced by the recent profit-booking on Wall Street following a rally fueled by rate-cut hopes. The dollar's strengthening against other currencies and the rise in U.S. Treasury prices reflect a cautious but optimistic market sentiment.
Top Gainers and Losers
As a top performer this week: Sei with over a 773.7% gain. This is due to the growing narrative surrounding Parallelized EVM Blockchain
The worst performing asset this week is Bounce, Bounce is a fully decentralized auction platform that uses blockchain technology.
Global Market cap
The total market capitalization of the cryptocurrency ecosystem has seen its first red week, falling from $1.75 trillion to $1.71 trillion in the past 7 days.
Stablecoin Flows
The total market capitalization of stablecoins has remains around its level at $130 billion. The Total Value Locked (TVL) of stablecoins in DeFi has fallen to $96 billion for the last 7 days.
Flagship Portfolio Vault Performance
Over the past 7 days, the share price of the Portfolio Vault went from 40.98 to 40.91, which is a 0.17% decrease.
Due to the recent rally and the fact that the Bitcoin ETF is largely accounted for, along with a slowdown in DeFi TVL and market cap during the rally, we have decided to remain bullish
If you’d like to access Flagship’s portfolio Vault, click here.
Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.
