US Equity markets ended the week a bit stronger, with NASDAQ closing higher by (NASDAQ⬆️0.7%) at $11.226 and S&P 500 higher by (S&P500⬆️1.5%) at $4.026. On the other hand, Ethereum outperformed equity markets and closed higher by (ETH⬆️4.6%) at $1.195, while Bitcoin ended the week higher by (BTC⬆️0.9%), closing at $16.444. The US equity markets kept their higher grounds as investors feel the Fed is becoming more dovish after the US CPI had indicated signs of retracing.

We forecast the inflation dropped further to 7.6%, with core CPI dropping to around 5.80% in November 2022. The last published US CPI for October 2022 stood 7.7% and the core CPI at 6.3%, compared to 8.20% and 6.64% in September.

If the inflation continues to drop down, we will see an increased likelihood of a risk asset rebound. Therefore, the next CPI reading, released on December 13th, 2022, is going to be closely watched. The market sees the US Federal Bank will begin to ease hiking on its next policy meeting in December and it is expected the bank will raise the fund rates by only 0.50%. The 10Y US government bond yield closed at 3.73%, while the 2Y closed at 4.48% on Friday.

The crypto market continues to be exposed to higher downside risks, as the market pays attention to other providers that were the most affected by the FTX collapse. Since the spot prices of digital assets dropped substantially, we are also seeing profits being squeezed at several Bitcoin miners.

If some miners begin to show signs of insolvency issues, the market may drop further as the costs to mine Bitcoin are getting higher.

The FTX drama brought a renewed push for decentralization, especially for decentralized crypto exchanges, while we can also see that the traditional exchanges and brokers benefit from the unfortunate fallout of the centralized crypto exchange in terms of their well-established reputation and full regulatory oversight. Despite of higher downside risks to digital assets in the coming weeks, there is an evident accumulation of cryptocurrencies by the retail ecosystem.

The on-chain analytics firm Glassnode reported that retail investors added almost 100k of BTC to their holdings since the FTX collapsed, which is an all-time high balance increase. It is a highly positive sign for a future supply squeeze when miners capitulate and a lot of small accounts becoming long-term holders in a short time.

The Digital Asset market sentiment (Crypto Fear & Greed Index) went up to ⬆️28/100, indicating Fear. The Total Cryptocurrency Market Cap went up to roughly 835 billion on Sunday’s close, around ⬆️3.5% higher compared to a week ago. Ethereum (ETH)’s Dominance decreased to 17.7%, lower by ⬇️1.0%, while Bitcoin (BTC)’s Dominance is also down by ⬇️1.4% to 37.9%.

WHAT TO WATCH FOR: The next monetary policy meeting for the FED: December 13–14th, 2022 and for the ECB: December 15th, 2022; US CPI for November 2022 will be released on December 13th, 2022.

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