Crypto bounces but weak US macro data, AI uncertainty threaten the recovery

Bitcoin and Ether gained momentum, reaching two-week highs, driven by expectations of a more expansionist monetary policy following weak US economic indicators, which boosted demand for scarce assets like gold and US Treasurys. However, the recovery faces threats from persistent economic uncertainty and growing concerns over an AI investment bubble, as noted by BlackRock. The US labor market showed signs of slowing in November, with private companies cutting jobs, which reduces immediate inflation concerns but prompts traders to await the Federal Reserve's interest rate decision for clearer policy guidance. Despite the positive liquidity outlook, the low leverage appetite in the crypto market, evidenced by low perpetual futures funding rates, suggests fragile sentiment compared to strong stock markets, indicating that cryptocurrencies may lag unless sentiment shifts.

(Source：Cointelegraph)