Scary start to week

With a financial world standing on one leg ahead of a big Fed meeting (what, more than three rate hikes this year, really?) and geopolitical tensions boiling – and the crypto sell-off worsening – sparks of bullish momentum arrived just before dawn: U.S. equities futures ticked higher. A quick check at 7:30 a.m. (EST), showed ... Dow and S&P futures giving back gains, turning red.

Bitcoin, which spent Christmas Day above $50,000, went into this past weekend plunging from $38K to $34K; then it spent Sunday in recovery mode, at around $36K. And although sub-$33K seemed on the table at 5:30 a.m. (EST), there was just now a semi-encouraging nudge back toward $34K.

Monday saw major coins crash, again. Bitcoin has fallen 23% over seven grueling days. At sub-$34K, BTC's resting at its lowest mark in six months. Ethereum is down nearly 40% just this month. Suddenly, the second-largest crypto is looking vulnerable to a trip below $2K. Other big coins, such as Cardano, Terra and Polkadot, each fell between 12% to 15%.

As if painfully grinding bear market conditions weren't difficult enough, Solana (SOL) endured a day-long network outage that left users in the lurch, and with their losses mounting. According to the Solana website, the network suffered a "partial outage" on January 21, 2022, and January 22, 2022. That outage, tweet-explained Anatoly Yakovenko, one of the network's co-founders, was caused by bots "flooding the network."

"Almost every cryptocurrency has been in freefall for days, but Solana has been one of the hardest-hit," said Decrypt.

As of 8:45 a.m. (EST), SOL had plunged 19% in 24 hours, compared to BTC, which lost 7% in that span, and ETH, which lost 12%.

If there is a relief rally to be had for risk assets it could come Wednesday with the Fed set to meet. Investment banking titan Goldman Sachs predicts a faster pace of Fed tightening. Likely not helping are the heightened geopolitical tensions between the U.S. and Russia.

“We see a risk that the [Federal Open Market Committee] will want to take some tightening action at every meeting until the inflation picture changes,” Goldman economist David Mericle said in a Saturday client note that rattled markets but set the stage for a relief rally should ultra-hawkish expectations go unmet (CoinDesk).

In December, the Fed projected three rate hikes in 2022. The January policy meeting is due to start tomorrow (Tuesday); carefully worded interest rate projections will be published on Wednesday.