CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
This week saw Bitcoin (BTC) push forward to a new high early in the week, with Bitcoin breaching $108,000 on Tuesday, before dumping hard into midweek following Wednesday's FOMC. While the $100K level held momentarily, bears quickly took control, driving prices lower. The total crypto market cap fell this week, with a decrease of 7.3% to $3.5T this week.
Bitcoin (BTC) saw a drop of 3.16% across the week, while Ethereum (ETH) fared much worse against it, falling 12.57% from the week prior.
Daily liquidations surged primarily on the longs, following Wednesday’s FOMC, with long liquidations hitting $844M on Thursday. Short liquidations remain largely muted, with an average of $150M liquidated per day. Funding rates across the board continue to fall, with funding for majors under 10% now, perhaps signalling a weakening demand in the market for risk as the year comes to a close.
📌 Michael Saylor’s MicroStrategy acquires another 15,350 BTC for a total of $1.5B at an average price of $100,386, in MicroStrategy’s sixth consecutive week of BTC purchases. - Link
📌 MicroStrategy has been added to the Nasdaq 100 Index, following a massive 453% increase this year alone. - Link
📌 Bankrupt exchange, FTX, announces 3 January 2025 as the effective date and record date for its Chapter 11 Plan of Reorganization. The initial distribution to creditors is expected within 60 days of this date. - Link
Why does it matter?
While the week saw a new all-time high break for Bitcoin, the euphoria around the move would not last, as markets quickly de-risked into FOMC and broke down further after the news. Despite a healthy leverage situation, liquidations continued to rise well into the latter half of the week, with just over $1B liquidated in longs and shorts on Thursday alone. Traditional markets did not take the news well too, with the S&P 500 down 3.33% over the week and the Nasdaq down 3.05%.
Altcoins underperformed hugely against Bitcoin, with BTC dominance rising more than 4.4% this week to 58.64%. Notable outperformers among altcoins were far and few between, including beloved memecoin, Fartcoin (FART), perpetual DEX and L1, Hyperliquid (HYPE) and AI agent infrastructure project, Virtuals Protocol (VIRTUAL).
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Narrative of the Week 📰
The Fed takes the headlines this week, with this month’s FOMC decision shaping the market move around the Fed’s decision and forecast for the coming year.
📌 The Fed announces a 25 basis points rate cut from 4.25% to 4.5% range, in line with expectations. - Link
📌 The Fed also forecasts a slowdown in rate cuts to two expected rate cuts from an initial three in 2025, as well as higher expected inflation from 2.1% to 2.5% for the year. - Link
📌 More than $1.5T wiped from the stock market as markets react to the Fed’s forecast for 2025. - Link
Why does it matter?
While the FOMC this month was expected to be an uneventful one, with the rate cut more or less expected to pass, the comments made by Fed chair, Jerome Powell, ended up rocking the market. Expectations of higher inflation in 2025 and lowered rate cuts shook up both crypto and traditional markets, sending Bitcoin back under 100K, while altcoins went into freefall. The news brought macroeconomic factors into the minds of investors once again, after the past six weeks have been relatively smooth sailing following the victory of Donald Trump in the US Presidential Elections.
Major Project Updates 🗓️
📌 Sonic (formerly Fantom) is now live on mainnet to all users. FTM holders can now upgrade to the Sonic token on a 1:1 basis via the official upgrade portal. - Link
📌 Ripple launches Ripple USD (RLUSD), an XRP-native stablecoin designed to support easy on/off-ramp and real-time payments on the XRP blockchain. - Link
📌 Avalanche rolls out their latest upgrade, Avalanche9000, bringing down costs to deploy an Avalanche subnet, while maintaining interoperability between the Avalanche main chain and its subnets. - Link
📌 Frax Finance introduces the North Star Hard Fork for their L2 chain, Fractal, which seeks to bring to the chain ‘real-time’ blocks similar to MegaETH, infrastructure to support on-chain AI agents and the FXTL token. - Link
📌 Ethereum Name Service (ENS), collaborates with ConsenSys-backed L2 Linea, to launch Namechain, their custom L2 to scale ENS to the next level. - Link
📌 Ethereum Name Service (ENS) is partnering up with Ubisoft to integrate ENS subnames into Ubisoft’s upcoming battle arena shooter game, Captain Laserhawk Universe. - Link
📌 Gaming network, Beam, introduces Beam Nodes, which will be used to secure the Beam Network. Minting of nodes will begin next week, starting at $1,250 in the first week and $3,750 thereafter. - Link
📌 Parallel EVM L1 blockchain, Monad, introduces the Monad Foundation, with some speculating that the move could be the precursor to the upcoming Monad mainnet and eventual Monad token launch. - Link
Why does it matter?
Parallel EVM L1 blockchain, Monad, introduces the Monad Foundation, a move which usually leads up to the launch of a token. Given that Monad has not released even a testnet yet, many speculators are wondering if the chain will be doing a quick launch of a testnet and subsequent mainnet in the coming weeks, especially with the consensus view of the limited time left in the bull market.
DeFi Brief 🏦
📌 Aave puts up a governance proposal to seek to adjust risk parameters of Aave on Polygon after a proposal to farm stablecoin reserves held in the Polygon bridge on protocols such as Morpho and Yearn. - Link
📌 DEX aggregator, Jupiter, unveils JupiterZ, a swapping solution which utilizes a unique RFQ model to enable gasless swaps and 0% slippage on selected pairs. - Link
📌 Synthetic stablecoin protocol, Ethena Labs, launches USDtb, a new stablecoin backed by BlackRock’s on-chain tokenized treasury bill product, BUIDL. - Link
📌 Donald Trump’s DeFi project, World Liberty Finance, continues their purchase of Ethereum DeFi tokens, this time with $250K in RWA project, Ondo, and $500K in synthetic stablecoin project, Ethena. - Link
📌 Liquid restaking project, KelpDAO, introduces KERNEL, their native token to power and grow their ecosystem. 10% of the total token supply will be allocated to their first airdrop. - Link
📌 After the passing of the governance proposal, Instadapp’s token, INST, has officially rebranded to FLUID. Additionally, 12% of the token supply will be directed to growth of their recently launched DEX, Fluid. - Link
Why does it matter?
Polygon’s recent proposal to put their $1B in bridge stablecoin reserves to work in DeFi protocols such as Morpho and Yearn has drawn significant flak from DeFi power users and builders in the space, especially considering the historical trend regarding bridge security. Bridge exploits still represent the top three largest known exploits of all time. As the leading money market project in the space, Aave’s proposal to withdraw from Polygon to mitigate such risk could be a huge bearish headwind for Polygon.
Meme Coins 🚀
📌 The owner of Kabosu, the dog behind the Doge meme, has granted the IP rights for her new dog, Neiro, to the Own the Doge DAO. - Link
📌 AI agent project, ai16z, teams up with Stanford University to launch a new AI lab, which aims to drive innovation in AI and bridging the gap between academia and industry. - Link
Fundraises 💰
📌 “Real-time” blockchain project, MegaETH, raises $10M in a community round on fundraising platform, Echo, in just under three minutes. - Link
📌 DePIN project, DAWN, raises $2.5M in a strategic funding round involving VanEck Ventures and VanEck’s Digital Assets Alpha Fund. - Link
📌 AI data project, Fraction AI, raises $6M in a pre-seed round led by the Spartan Group and Symbolic Capital, with support from Borderless Capital, Anagram, Foresight Ventures, and more. - Link
📌 SocialFi project, Fantasy Top, raises $4.25M in a seed round led by Dragonfly, with support from Manifold Ventures, alongside the launch of Fantasy V2. - Link
Airdrops Abound 🎁
📌 The Pudgy Penguin official token, PENGU, has launched, dropping tokens to holders of NFTs within the Pudgy Penguins ecosystem, related NFTs, OG Ethereum and Solana users, and more. - Link
📌 Fuel Network airdrops 10% of their total token supply, or 1B tokens, to more than 200,000 eligible addresses as part of their genesis drop. - Link
📌 Intent-based DEX, Odos, announces their upcoming ODOS token launch and airdrop, which will airdrop the token to 530,000 eligible early users of the project. - Link
📌 Ethereum proof-generation infrastructure project, Aligned Layer, announces their upcoming ALIGN token airdrop, which distributes tokens to addresses which held tokens of selected L2s and projects through their all-time lows. - Link
📌 Derivatives clearing infrastructure project, SYMM, launches their token and airdrop, distributing to early users of their platform. Users can now claim 30% of their airdrop, with the remaining 70% vesting as long as the user continues to trade. - Link
Tweet of the Week 📝
Source: @ReetikaTrades
Mood: BTC looks better as a six-figure coin.
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