The Federal Reserve began the week by injecting funds into the financial markets totaling $6,800 million through repurchase agreements. This is the continuation of recent monetary policy changes, with more than $38,000 million injected in the last 10 days.
The Fed's liquidity operations are in line with the official conclusion of quantitative tightening and a recent interest rate cut, which constitutes another manifestation of the momentum of moderate monetary policy.
This liquidity injection is considered a positive trend in the cryptocurrency market. This scale of repos has not been experienced since 2020, highlighting the shift in the Federal Reserve's posture as markets approach 2026.
As long as this liquidity boost is maintained, it is likely to have the effect of fostering risk appetite among investors, especially in crypto assets.
◽U.S. GDP data
On Tuesday, the United States will release its actual GDP figures for the third quarter. Markets anticipate an annualized growth rate of 2.5%, a moderate signal amid ongoing inflation concerns.
The cryptocurrency market can be very responsive when actual data contrasts with expectations, considering that the Federal Reserve is contemplating new rate cuts in 2026.
Recent employment figures in the United States indicated better-than-expected job growth and also increased unemployment to 4.6% in over four years.
The publication of GDP may provide a better understanding of the health of the economy and the new measures adopted by the Fed, which can provoke volatility in cryptocurrency markets.
◽Unemployment benefit claims and China's M2 data
Midweek, investors will be attentive to initial unemployment benefit claims in the U.S. In the event of a surge in claims, new rate cuts are expected. On the other hand, a favorable labor market could reduce the need for monetary policy easing.
China will also release its M2 money supply data on Friday, another important indicator of the global liquidity trend. China has experienced a year-on-year increase of 8% in its M2 money supply, reaching a record 336.9 trillion yuan in November. A greater expansion of Chinese liquidity may have a positive impact on global risk markets, and cryptocurrencies are one of them.
Calm during the holidays or incoming volatility?
As Thursday coincides with the holiday festivities, liquidity may decrease in traditional markets. However, the cryptocurrency market operates 24/7 and usually experiences greater volatility during periods of low volume.
The cryptocurrency market has a thin line between positive and negative as macroeconomic events unfold. What will happen this week if it turns into a Santa Claus Rally or if unexpected corrections occur?
