TheDrop Market Analysis, 12/02/25

Markets rose higher as Bitcoin saw massive progress in its efforts to recover due to a wave of short-liquidations in the crypto market.

Crypto trading platform Coinbase, among the stocks most affected by today's crypto boom.

The Nasdaq led gains today with its 0.59% rise, reflecting massive buying pressure among stocks in the technology sector. The S&P 500 likewise grew 0.25% in point valuation, and the Dow Jones Industrial Average ticked up 0.39%. However, the Russell 2000 fell by a slight 0.17% despite outperforming the other three indices yesterday. The VIX volatility index fell slightly as stocks ended the day slightly higher than how they started.

European stocks, meanwhile, remained stagnant as peace talks continue for the Russo-Ukrainian War. The British FTSE 100 ended roughly the same as where it started, the French CAC index fell 0.28%, and the German DAX P index rose 0.51%. Asian stocks continued to surge, fueled by Japan's interests in raising interest rates, with its own Nikkei 225 index rising 0.75% as of 7:30 PM EST. Chinese & Hongkonger stocks fell very slightly, though some enthusiasm emerged as China saw results from its soybean import trade from the United States as part of their mutual reconciliation of trade relations post-trade war.

Cryptocurrencies rose across the day, with Bitcoin surging past 5.6%, the XRP rose 6.3%, and Ethereum rose 7.2% (all as of 7:30 PM EST). Bitcoin specifically surged as many traders who previously betted on Bitcoin dropping were forced to buy back, pushing price higher. Higher trading volumes and improving market sentiment toward risk-assets also contributed to its rise. Yet, observers, according to Finance Magnates, saw this rise as more of a "relief rally" instead of a complete bullish reversal, as it previously fell by over $30,000 per Bitcoin since its peak.

Investors maintained their optimism for a 25-50 basis points interest rate cut in December, with FedWatch reporting over 85% likelihood today. This, combined with the Bitcoin rally, created a very favorable environment for buying across the stock market.

Crypto-heavy stocks like Coinbase and MicroStragy rose significantly, with the former rising 1.32% and the latter surging 5.78%. However, members of the Magnificent Seven group of tickers remained stagnant as overvaluation skepticism prevented buying pressure. Nvidia, Microsoft, Apple, and Meta did outperform the market slightly.