Anndy Lian
Crypto’s triple threat: Exchange hack, technical rejection, and Fed policy fog
The crypto market’s 1.24 per cent decline over the past 24 hours reflects a convergence of distinct yet interlocking pressures: security vulnerabilities, technical resistance, and macroeconomic ambiguity. All of this unfolds against the backdrop of a quiet US holiday week. While the broader seven-day trend remains in positive territory at plus 4.26 per cent, the short-term retracement underscores the fragility of risk sentiment in an environment where liquidity thins, correlations tighten, and geopolitical shocks reverberate through digital asset markets with amplified force.
This week’s bearish tilt lies in the Upbit hack, a stark reminder that even regulated, institutionally backed exchanges remain high-value targets for sophisticated threat actors. On November 27, South Korea’s largest cryptocurrency platform confirmed a theft of US$30.4 million in digital assets, with early forensic evidence pointing squarely to North Korea’s Lazarus Group. This attribution carries weight not only because of its geopolitical implications but also due to the group’s notorious track record of targeting crypto infrastructure to fund regime activities.
The market’s immediate reaction, a plunge into Extreme Fear as measured by the Fear & Greed Index dropping to 20, demonstrates how legacy concerns about custody and exchange security continue to haunt an asset class striving for mainstream legitimacy. Investors responded by rotating capital toward perceived safe havens within the crypto universe, notably Bitcoin, whose dominance rose to 58.61 per cent. This flight to relative stability highlights a recurring pattern. When trust in centralised intermediaries erodes, decentralised base-layer assets often benefit, even if only temporarily.
Compounding this security-driven caution was a decisive technical breakdown in Bitcoin’s price structure. For days, US$92,000 had served as a critical psychological and structural resistance level. The failure to sustain a breakout above this threshold triggered a cascade of algorithmic sell orders, resulting in US$20.41 million in liquidations, predominantly short positions caught off guard by the initial dip but unable to recover as momentum faded. Technical indicators further reinforced the bearish undertone. While the 14-day RSI at 42.63 remains technically neutral, it shows a clear loss of upward momentum, slipping from overbought territory earlier in the week.
Meanwhile, the MACD histogram, though still positive at plus 20.24 billion, presents a troubling divergence. Price action contradicts the bullish signal implied by the indicator, suggesting a weakening of buyers’ conviction. Compounding the issue, derivatives open interest fell by nearly 5 per cent, signalling that leveraged traders are stepping back, a classic sign of risk aversion ahead of major macroeconomic events.
This brings us to the third pillar of today’s market dynamics: macro correlation and policy uncertainty. Despite the US equity markets being closed for Thanksgiving, crypto did not trade in isolation. Its seven-day correlation with the Nasdaq-100, measured via the QQQ ETF, has surged to an unusually tight 0.92. This near-perfect linkage means that even in the absence of US equity trading, crypto remains hostage to the same macro narratives driving tech stocks, namely, the path of Federal Reserve policy. Recent US jobs data came in stronger than expected, tempering market expectations for aggressive rate cuts.
While UOB still anticipates a 25 basis point reduction at the December 17 FOMC meeting, the probability has softened from near-certainty to approximately 85 per cent. This shift matters deeply for crypto, which has increasingly functioned as a risk-sensitive asset class. The slowdown in spot Bitcoin ETF inflows, dropping to just US$21 million on November 26 compared to US$128 million on prior high-volume days, reflects institutional hesitation. With the Fed entering its pre-meeting blackout period this weekend through December 12, 2025, traders are left to navigate a policy vacuum, relying on lagging indicators and thin holiday liquidity to set prices.
That thin liquidity has magnified market volatility. Total 24-hour trading volume across major exchanges fell by 21.5 per cent, a typical seasonal pattern during US holidays, but one that exacerbates price swings when large orders enter the market. In such environments, even modest sell pressure, whether from hacked assets being offloaded or leveraged positions unwinding, can trigger outsized moves. This dynamic is particularly acute in crypto, where market depth remains shallower than in traditional equities or FX markets, despite growing institutional participation.
Within this short-term turbulence, structural undercurrents remain supportive. The broader macro environment still points toward impending monetary easing. Bond markets signal renewed appetite for fixed income, with UOB noting that spread widening has made quality bonds attractive again, a precursor to rate cuts. Meanwhile, the US dollar has held steady, and Asian currencies are gaining modest ground, buoyed by easing trade tensions and a stable Chinese yuan. These factors create a more favourable external backdrop for risk assets, including crypto, once the immediate fog of uncertainty lifts.
Looking ahead, three variables will dictate the market’s next directional move. First, developments in the Upbit investigation could either calm nerves if authorities confirm containment and recovery efforts or deepen panic if stolen funds begin circulating widely. Second, Bitcoin’s ability to hold the 89,080 dollar level, which corresponds to the 50 per cent Fibonacci retracement of its recent rally, will serve as a critical technical support.
A breakdown below this level could invite further liquidations and test deeper support zones. Third, and most importantly, Friday’s release of the US Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, will offer the clearest signal yet on whether December’s anticipated rate cut remains on track. A softer print would likely reignite risk appetite across equities, bonds, and crypto alike, while a hotter-than-expected reading could extend the current period of caution.
In sum, today’s dip is not a reversal of trend but a recalibration, a moment of hesitation amid overlapping uncertainties. The crypto market, now deeply enmeshed in the global macro framework, cannot escape the gravitational pull of Fed policy, tech sector sentiment, or geopolitical risk. Its resilience over the past week, despite the Upbit breach and technical rejection, suggests underlying demand remains intact.
The challenge for market participants lies in distinguishing transient noise from structural shifts. In a world where digital assets increasingly mirror traditional financial cycles, patience and precision will determine who navigates this transitional phase most successfully.
Source: https://e27.co/cryptos-triple-threat-exchange-hack-technical-rejection-and-fed-policy-fog-20251128/
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