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Asian Markets See Sharp Losses as Crypto Weakens and Fed Signals Caution
Asian equities plunged on Friday, mirroring Wall Street’s sharp downturn as Federal Reserve officials signaled renewed caution on rate cuts. The risk-off sentiment rippled across global markets, dragging Bitcoin below $100,000 for the third time this month and deepening anxiety in the crypto space.
Asian Stocks Tumble as Risk Appetite Fades
As of 5:00 am UTC, Asian markets opened sharply lower. Japan’s Nikkei slid 1.73% to 50,392, while South Korea’s KOSPI dropped 3% to 4,045.44, marking one of its steepest declines of the quarter.
Hong Kong’s Hang Seng wasn’t spared either, falling 1.13% to 26,767 as regional selling intensified.
Australia’s S&P/ASX also joined the downturn, losing 1.44% to 8,627.5, underscoring the widespread caution across Asia-Pacific markets.
Fed’s Hawkish Tone Shakes Global Sentiment
The slump followed a series of hawkish Fed statements that reduced traders’ confidence in a December rate cut.
Probability of a cut fell to 51%, down from 63%, pressuring risk assets across the board.
This shift hit crypto markets particularly hard. Bitcoin slipped below the psychological $100,000 level, while Ethereum plunged 8.33% in the last 24 hours, struggling to regain ground after October’s flash crash that triggered record-level liquidations.
Crypto Markets Struggle as Open Interest and Confidence Wane
Across derivatives platforms, appetite remains muted. Binance Futures’ open interest sits at $9 billion, still far below October’s $12 billion peak, signaling a slow return of capital and ongoing risk aversion.
Reports of potential Japanese regulations targeting cryptocurrency treasury companies further dampened market mood. The Japan Exchange Group, operator of the Tokyo Stock Exchange, reportedly signaled increased regulatory scrutiny—news that sent another wave of caution through digital asset investors.
Macro Uncertainty Adds Pressure to Risk Assets
Derivatives markets have yet to recover from October’s massive deleveraging, and traders are now waiting for fresh U.S. economic data, including retail sales, to gauge the Fed’s next move.
Fed officials’ tone remains firm:
Minneapolis Fed’s Neel Kashkari opposed last month’s rate cut, while Cleveland Fed’s Beth Hammack stressed the need for restrictive policy amid lingering inflation concerns.
This uncertainty is weighing on global risk assets. Even traditional safe havens felt the pain—gold fell 0.6%, oil headed for its third straight weekly decline, and the U.S. dollar retreated despite higher yields, highlighting unusual cross-asset behavior.
[…] Nikkei 225 fell 1.88% as early deleveraging took hold. Analysts warn that the adjustment could spark […]
[…] Lower Treasury yields, according to some analysts, might cause investors to reevaluate their holdings. They might switch from conventional bonds to riskier assets like cryptocurrency as a result of this. This pattern has given proponents of the cryptocurrency market hope that the erratic profit loss in digital assets that followed this week will be stabilized. […]