Strong PCE data boosts US stocks to new highs; why does the crypto market remain stagnant?

Recent PCE data releases have triggered intense market volatility. The US economy’s performance exceeded expectations, yet failed to boost the cryptocurrency market. This reflects the starkly different reactions of traditional finance and digital assets to economic signals.

Economic Data Surpasses Expectations, Stocks, Bonds, and Commodities Rise Together

The US Q3 real GDP annualized quarterly growth rate preliminary figure reached 4.3%, far exceeding the market expectation of 3.3% and also higher than the previous 3.8%. Real personal consumption expenditures increased by 3.5% quarter-over-quarter, significantly surpassing expectations and the previous figure. These impressive economic data pushed the stock market higher, with the S&P 500 and NASDAQ nearly hitting new highs. Meanwhile, gold has broken through $4,500, and silver has hit a historic high of $70 per ounce for the first time. The simultaneous surge of precious metals and stocks is quite rare.

Mild PCE Inflation Boosts Traditional Assets

Core PCE inflation initial annual rate is 2.9%, in line with market expectations. This PCE data indicates that US inflation pressures have not sharply accelerated. Analysts suggest that the rise in multiple asset classes may be related to moderate inflation concerns, a weakening dollar, and growing industrial demand. The moderate performance of PCE data provides market confidence, driving traditional assets higher across the board.

Crypto Market Weak at Year-End, Volatility Significantly Declines

In stark contrast to the strong performance of stocks and commodities, the crypto market remains quite dull. BTC is still fluctuating between $86,000 and $88,000, with the latest price at $89.44K, a 24-hour change of +1.24%, unable to break through effectively. ETH also struggles to stay above $3,000, currently at $2.98K, with a 24-hour change of +1.46%, repeatedly oscillating around key levels.

Notable analysis firm QCP Capital points out that implied volatility for BTC and ETH has dropped over 5%, with medium- and short-term declines exceeding 10%, reflecting a market mood that is calming.

Christmas Holidays and Settlement Periods Influence Short-Term Trends

Due to Christmas holidays and year-end settlement, the crypto market is expected to maintain low volatility over the next two weeks, with a likely dull and flat trend. Deleveraging by institutional investors and year-end tax-loss selling may further increase short-term volatility. However, without clear technical breakthroughs, the market may continue to oscillate until the end of the year. Analysts believe that a real turning point might only occur after the Federal Reserve’s January meeting. Although PCE data remains moderate, its future trajectory is a key variable that could directly influence Fed policy decisions and market expectations.