The core event in the crypto market last week (from December 2 to 13) was the Federal Reserve's interest rate cut. Although this is the third consecutive rate cut in 2025, the market exhibited a typical 'buy the expectation, sell the news' pattern, and did not see the expected rise from investors.
📅 Review of Last Week's Market and Macroeconomic Impact
1. Core Macroeconomic Event: The Federal Reserve cut interest rates
· Event: The Federal Reserve announced a 25 basis point interest rate cut on December 10.
· Market Reaction: The interest rate cut has been fully priced in by the market (with a probability of 82.8%). After the announcement, the price of Bitcoin only briefly rose by 2-3% before turning down, creating a situation of 'buy the expectation, sell the news.'
2. Key market dynamics
· Capital flows: Market funds show a risk-off characteristic. Last week, both Bitcoin and Ethereum spot ETFs recorded net outflows. At the same time, funds are concentrated in leading assets, with Bitcoin and Ethereum performing far better than small and mid-cap tokens.
· On-chain behavior: There is a divergence within the market. 'Whales' (addresses holding 10-10,000 BTC) resumed accumulation behavior after the end of November; while retail investors (holding <0.01 BTC) continued to hold or even increase their holdings during the decline, without showing panic selling.
· Asset performance comparison: Compared to traditional assets, cryptocurrencies are underperforming. Year-to-date, gold has risen over 61%, the S&P 500 has risen 17.5%, while Bitcoin has fallen about 3.5%.
3. Market sentiment indicators
· Fear and Greed Index: Currently in the 'extreme fear' range at 22.
· Market breadth: Performance is weak, with only a few percentage points of token prices above the 200-day moving average.
🔭 Next week's market prediction: Focus on two key points
1. Potential risks in macro policy
The market has fully priced in expectations for future rate cuts, making it vulnerable. Next week, be alert to any events that might 'reset' expectations, such as:
· Unexpected hawkish remarks from Federal Reserve officials.
· If economic data (such as inflation and employment) is stronger than expected, it may lead the market to reassess the future easing path.
2. Endogenous signals in the crypto market
Some on-chain and technical indicators suggest that the market may be building a local bottom:
· Miner signals: The Bitcoin 'Hash Ribbons' indicator has issued a buy signal, which historically appears after phases of miner capitulation leading to local bottoms.
· Key price levels: For the market to regain an upward trend, it needs to effectively reclaim key resistance levels. According to technical analysis, Bitcoin needs to break through the core range of $90,000 - $95,000.
· Policy benefits: In the long term, there are positive signals emerging from U.S. regulatory bodies. The U.S. Congress is urging the SEC to update rules to allow pension funds (401k) to invest more broadly in digital assets, which could bring in new long-term capital if the policy is implemented.
💎 Summary
Overall, the current market is in a fragile balance dominated by macro sentiment. The short-term trend is driven by expectations of Federal Reserve policy, and any deviation from the current easing narrative could trigger volatility. However, there are also some positive bottoming signals emerging within the cryptocurrency market.
In operation, it is recommended that you closely monitor the Federal Reserve's policy direction and the key technical price levels mentioned above. If Bitcoin can successfully hold the key resistance level, the market's rebound may be more sustainable.
