The falling inflation in the US and Japan raised hopes for easier Fed policy, while Japan’s surprise rate hike added global tightening pressure. The US Consumer Price Index revealed a 2.7% year-over-year inflation for November, lower than the expected 3.1%, according to data from Investing.com. This was the first US CPI report since late October. Quite similarly, Japan also recorded a slight decline in its November YoY CPI, falling from 3% to 2.9%. The Bank of Japan, however, announced it has decided to ...

While the crypto market has been obsessing over the Federal Reserve and Jerome Powell's next pivot, there's a big old storm brewing on the other side of the world. A storm that history suggests could send Bitcoin crashing by 20% or more in a matter of days. We're staring down the barrel of a potential $4 trillion liquidity shock.But unlike the Fed, this central bank isn't looking to print money. They're looking to drain it. The date you need to circle in red on your calendar is the 19th of December because ...

Group 1: Japan's Bond Market Impact - Japan's bond market stress is intensifying, particularly after a weak 20-year JGB auction, indicating rising volatility and soft demand [1] - The situation in Japan could lead to a tightening of global liquidity conditions if capital begins to return home, affecting markets beyond Japan [2][7] - The Japanese inflows have historically supported US Treasuries and equities, and any shift could impact risk assets, including cryptocurrencies [2][7] Group 2: US Economic Data and Market Sentiment - Recent US employment data showed a decline of 32,000 jobs, contrary to expectations of an increase, contributing to a cautious market sentiment [3] - The tight financial conditions in the US are reflected in the crypto markets, which have experienced increased volatility and a pullback [3] Group 3: Tether's Financial Health - Concerns regarding Tether's solvency have resurfaced, but current data indicates a surplus of approximately $6.8 billion in reserves over liabilities, suggesting resilience [4] - Tether has generated over $10 billion in profitability this year, primarily from interest income on reserve holdings [4] Group 4: Digital Asset Treasury Sector Adjustments - The Digital Asset Treasury sector is recalibrating after significant market corrections, with companies facing pressure due to limited operating income and high token exposures [5] - Companies are responding in various ways, including issuing new equity or considering buybacks and selective token sales to strengthen balance sheets [5] Group 5: Market Flows and Uncertainty - Fund flows in the market remain positive at approximately $725 million week-to-date, although minor outflows were observed due to a downgrade in December rate cut expectations [6]

Core Insights - Bitcoin price predictions for 2026 are highly contentious, with forecasts ranging from $150,000 to $250,000, reflecting a significant divergence in analyst opinions [2][3][21] Group 1: Price Predictions - Some analysts predict a conservative target of $150,000 to $200,000, contingent on Bitcoin maintaining support around $102,000 and a stable macro environment [7][21] - Fundstrat Global Advisors forecasts a more bullish target of $200,000 to $250,000, driven by anticipated ETF inflows and a potential supply squeeze [12][23] - Extreme models suggest prices could reach $300,000 to $500,000 if global liquidity remains loose, although these scenarios assume ideal conditions [13][21] Group 2: Key Catalysts - The upcoming Bitcoin halving and spot Bitcoin ETF inflows are identified as critical catalysts influencing price movements [2][14] - Analysts are divided on whether ETF inflows represent new capital or merely a reallocation from other crypto products, impacting overall demand [18][19] - Corporate adoption of Bitcoin, similar to MicroStrategy's strategy, could significantly tighten supply and support higher prices, but regulatory challenges could hinder this trend [19][21] Group 3: Market Dynamics - The traditional view emphasizes Bitcoin's halving cycle as a primary driver of price, while some analysts argue that current liquidity conditions are more influential [15][16] - Market sentiment and technical structures, such as Elliott Wave analysis, suggest that maintaining support near $102,000 is crucial for a potential rally [20][21] - Fear-driven events, like major exchange failures, could lead to mass liquidations, underscoring the volatility of the crypto market [20][24]

Core Insights - The current downturn in the crypto market is characterized by significant volatility, with historical patterns indicating multiple drawdowns of 30% to 50% during bull periods [2][12] - The Federal Reserve's monetary policy is a major factor influencing the crypto market, with a strong correlation between crypto prices and global liquidity [5][11] - Recent market activity has seen a rotation into higher quality assets like Bitcoin and Ethereum, while altcoins have experienced more severe declines [12][14] Market Dynamics - The crypto market is experiencing a liquidity shock, which is expected to resolve in a few months, similar to past events [20][22] - A significant deleveraging event occurred on October 10, resulting in approximately $19 billion in liquidations, leading to a rebalancing of portfolios [14][17] - The market is currently witnessing heightened volumes and volatility, particularly during holiday periods, which historically contribute to price movements [6][7] Investor Sentiment - Investors are closely monitoring the Federal Reserve's upcoming announcements, with an 87% chance of a rate cut in December being priced in [9][10] - The market is attempting to derisk ahead of the December meeting, with expectations for a gradual easing path from the Fed [11][21] - The current selloff has seen Ethereum, Solana, and XRP down more than 9%, while Bitcoin is down over 7% [23]

Core Viewpoint - Bitcoin is experiencing a pullback after falling below the $90,000 level, but Standard Chartered suggests that the recent sell-off may have reached its conclusion [1][2] Group 1: Market Analysis - Standard Chartered's Head of Digital Asset Research indicated that the recent pullback is a rapid version of previous corrections seen in the last couple of years [2] - Multiple on-chain metrics, including MicroStrategy's mNAV, have hit absolute lows, with mNAV currently at 1.0 [2][3] - The realized loss margin for Bitcoin stands at -16%, which is below the historically significant threshold of -12% associated with potential rebounds [3] Group 2: Technical Indicators - The SuperTrend indicator on the weekly chart has recently switched to sell mode, which historically has led to average declines of 61% [4] - Applying this average decline to the current market structure suggests a potential move towards $40,000 for Bitcoin [5] Group 3: Macro Context - Despite a $7 trillion increase in global M2 money supply since late 2024, Bitcoin has not fully capitalized on this liquidity surge due to capital being absorbed by government debt and short-term instruments yielding 4-5% [7] - The presence of risk-free alternatives with tangible returns has increased the opportunity cost for speculative assets like Bitcoin, contributing to volatile trading patterns [8]

Market Cycle Analysis - The crypto market has historically followed the business cycle, potentially extending into 2026, suggesting a prolonged bull market [2] - Macro analysts suggest the crypto market cycle is no longer solely based on Bitcoin halving but correlates with the economic cycle, particularly the ISM Manufacturing Index [6][7] - The ISM, an indicator of economic activity, has historically correlated with Bitcoin's cycle tops and bottoms, but this pattern has recently broken [9][10] - An extended debt refinancing cycle, with average debt maturity increasing to approximately 54 years due to the pandemic, may be extending the liquidity and crypto cycles [12] Liquidity and Economic Indicators - Some analysts argue that economic indicators like the ISM are misleading and have unclear correlation with global liquidity [16] - Global liquidity, measured by Global M2, has risen, but Bitcoin's price has flatlined, weakening the correlation between the two [18] - Central bank policies and debt refinancing challenges could lead to a contraction in global liquidity, potentially impacting the crypto market [20][21] - Economic data may be deceptive due to factors like inflation and unemployment rates, making the economy appear stronger than it is [26][27] Future Outlook and Investment Strategy - The crypto market is expected to continue a gradual upward trend, mirroring the overall economy [40] - Assuming a recession is avoided, Q4 2025 is projected to be bullish, with Bitcoin potentially reaching its cycle top, followed by Ethereum and altcoins approximately one month later [47][48] - The current crypto market cycle differs from previous cycles due to less loose monetary policy, more mature regulatory frameworks, and different patterns of retail participation [44][45] - AI-related ventures have significantly contributed to economic growth, particularly in the US, impacting sectors like chip manufacturing and infrastructure [36][37]

Market Overview - The market has transitioned from merely observing interest rates to a full liquidity regime, where central bank balance sheets and cross-border capital flows are the primary drivers of risk rather than the Federal Reserve's rate adjustments [1] - Central bank buying, de-dollarization flows, and institutional portfolio hedging are the main forces driving gold prices higher, indicating a shift beyond traditional inflation-hedge frameworks [2] Predictions and Trends - Prediction markets indicate a steady but shallow easing cycle from the Fed, favoring gold and digital assets over high-beta risks, with a 76% chance of three rate cuts in 2025 totaling 75 basis points [3] - Kalshi traders assign a 51% probability that Bitcoin will break $130,000 this year, with lower probabilities for $140,000 and $150,000 [4] Market Positioning - The market is preparing for a slow-burn rally rather than a speculative surge, as easing expectations gradually influence real yields and dollar liquidity [5] - On-chain signals suggest a liquidity-fed advance rather than an adrenaline-driven bull market, indicating potential for continued asset appreciation without aggressive Fed intervention [6] Current Market Movement - Bitcoin is trading above $110,500, down 2%, influenced by U.S.–China trade tensions and global risk concerns, with analysts warning that breaching the $110,000 support could lead to a drop towards $96,500–$100,000 [7] - Ethereum is trading around $3,900, down about 4%, as investors reduce exposure amid macro uncertainty, although some remain optimistic about its potential to "catch up" to gold over time [7]

$ETH will follow global liquidity! https://t.co/ZfxGp7BxvG ...

The Global Liquidity cycle isn't completed.We're heading higher! https://t.co/ipZw12JRP6 ...