The U.S. stock market closed volatile and slightly down, failing to recover from the sell-off after the Federal Reserve lowered its expectations for rate cuts next year. The plunge in cryptocurrencies was even more dramatic, with Bitcoin reaching a low of $95,700 this morning and Ethereum dipping to $3,322, resulting in a total liquidation of $863 million across the network in the last 24 hours.

U.S. Economy Strong, but Stock Market Unable to Recover from Fed-Induced Sell-Off

The U.S. stock market closed volatile, slightly down, unable to rebound from the sell-off following the Federal Reserve's downward adjustment of next year's rate cut expectations.

Data from the U.S. Department of Labor released on Thursday (12/19) showed that initial unemployment claims for the last week dropped to 220,000, below the market's expectation of 229,000, continuing some seasonal fluctuations often seen during holidays. The third-quarter GDP was revised up from 2.8% to 3.1%.

The data confirmed the robustness of the U.S. economy and validated the Federal Reserve's cautious approach towards a slow easing of policy. With the Fed cutting rates by a quarter point as expected by the market, signaling a smaller rate cut in the future, major U.S. stock indices plummeted on 12/18. The VIX, an indicator of market fear, surged to 27.62 earlier but saw some decline on Thursday.

The Bank of Japan decided to maintain its dovish stance with unchanged interest rates, leading to a 1.51% rise in the dollar against the yen to 157.13, the highest since July. Governor Kazuo Ueda stated that more time is needed to assess recently released economic data and the policy impacts from the newly-elected U.S. President Trump.

The market will closely watch for the last significant data release of the year on Friday - the November Personal Consumption Expenditures (PCE).

Near $863 Million Liquidated in 24 Hours

According to Coinglass data, over the past 24 hours, the total liquidation amount in the cryptocurrency market reached $863 million, with $695 million from long positions and $168 million from short positions, affecting over 240,000 traders.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.