Asia Morning Briefing: Bitcoin Trades at $109K as U.S. ETF Demand Fades and Powell’s Hawkish Tone Hits Risk Assets

Market Overview - Bitcoin is trading around $109K as traders react to Fed Chair Jerome Powell's comments, which have cooled demand for BTC ETFs and other risk assets [1] - Polymarket traders now assign a 71% chance of a 25-basis-point rate cut at the Fed's December meeting, down from about 90% before Powell's remarks [2] Investor Sentiment - U.S. investor demand for crypto has sharply cooled, with spot bitcoin ETFs experiencing a seven-day average outflow of 281 BTC, one of the weakest readings since April [3] - Coinbase premiums for both Bitcoin and Ether have flattened to near zero, indicating that both institutional and retail traders are taking profits rather than increasing exposure [3] On-Chain Analytics - Bitcoin struggles below the short-term holders' cost basis of around $113,000, with long-term holders distributing approximately 104,000 BTC per month [4] - Transfer volumes from long-term holders to exchanges have surged to $293 million a day, suggesting seasoned investors are cashing out amid weakening demand [4] Broader Crypto Market - The broader crypto market reflects fatigue, with Solana falling 8% to $186 despite the launch of the first U.S. spot Solana ETFs [5] - Large on-chain transfers from Jump Crypto to Galaxy Digital have raised speculation about portfolio rebalancing, further dampening sentiment [5] Future Outlook - Traders are closely monitoring the Fed's next move, with a 55% chance assigned to no change in rates, which has increased slightly since Powell's comments [6] - The potential for a change in Powell's stance could arise if upcoming economic data paints a worse picture than currently known, which crypto traders will be watching closely [6]