Cryptocurrency Market Weekly Review (12.08~12.14): Rate cuts support, earnings reports suppress, BTC continues to fluctuate within a narrow range

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Author: 0xBrooker

The Federal Reserve’s rate cut and liquidity release boosted BTC’s price bottom this week; AI tech stocks’ earnings falling short continued to squeeze high-beta asset valuations, suppressing BTC’s upward potential. Ultimately, after testing last week’s high, BTC maintained a medium-term “bottoming” trend.

ETH, which experienced a larger decline earlier, showed a stronger rebound, but ultimately also fell back with the overall market trend.

Under the influence of rate cuts and slightly improved short-term liquidity, both assets attempted to break through the downward trendline this week but failed, retreating back within the downward trendline.

Overall, BTC moved in tandem with the Nasdaq, waiting for next week’s November CPI and non-farm payroll data to guide the market lacking trading points, while also facing the impact of Japan’s rate hike next week.

Policy, macro finance, and economic data

After a rollercoaster ride that severely damaged BTC’s rally, the Federal Reserve’s November FOMC meeting as scheduled cut rates by 25 basis points to 3.50%~3.75%. The Fed’s statement emphasized: on the “dual mandate risk trade-off,” the downside risks to employment have increased, while inflation “remains slightly high”; future decisions on “further adjustments” will depend on data, outlook, and risk balance. This indicates that, on the dual mandate, the Fed is currently slightly leaning toward the employment side.

This somewhat dovish statement was tempered by internal discord within the Fed—9 out of 12 members supported the cut, 3 opposed (1 advocating a 50bp cut; 2 opposing any cut).

The dot plot for 2026~2028 shows more dispersion, indicating differing views on “inflation stickiness vs. employment slowdown”; the “Longer run” dots are concentrated around 3% to slightly above 3%, suggesting that the long-term neutral interest rate may be higher than pre-pandemic levels. This pushes the 2026 rate cut expectations down to 1~2 times of 50 basis points each. This is a neutral guidance, potentially helpful for employment but insufficient to support high-beta assets in the current environment.

In response to short-term liquidity tensions, the Fed restarted short-term Treasury purchases, explaining at the press conference that RMP (Repurchase Market Program) will be used to maintain “ample reserves,” with about $40 billion in the first month, emphasizing that RMP does not signal a change in monetary policy stance. The first purchase has already been completed.

After over a month of valuation destruction, high-beta assets like AI tech stocks have not stabilized. Earnings reports from Oracle and Broadcom this week again shook market confidence.

Following Q3 spending-driven stock price increases, the market is now more focused on AI stocks’ debt issues and whether high investments can quickly translate into profit growth. The release of these two earnings reports created a “soft and hard” dual impact, prompting the market to reprice the “AI return cycle,” leading to AI-weighted stocks dragging down the Nasdaq and overall risk appetite. Nvidia and BTC both lost their rebound gains, returning to the starting point of this week.

The 10-year US Treasury yield remains around 4.18%, exerting pressure on high-duration assets.

Although the Fed has begun bond purchases and the Treasury’s TGA account has started to decline due to spending, with SOFR returning to the Federal Reserve’s target range, short-term liquidity is gradually easing but still not abundant. Amid doubts about AI stocks’ debt and profit returns, US stock funds show signs of shifting toward consumer and cyclical stocks. The Dow Jones and Russell 2000 indices both hit new highs this week.

In the uncertain environment of a rate cut in 2026 and with the new Fed chair yet to be appointed, high-beta assets like AI stocks and BTC still lack capital favor. The most optimistic expectation is that after Japan’s rate hike next week and the release of US employment and inflation data, the market may open a “Christmas rally.”

Cryptocurrency market

This week, BTC opened at $90,402.30 and closed at $88,171.61, down 2.47%, with a volatility of 7.83%, and trading volume slightly contracted. Technically, BTC temporarily broke through the downward trend channel before the rate cut, but was subsequently pulled back after AI earnings reports.

BTC price trend (daily)

Currently, BTC remains in a consolidation phase after a sharp decline. Whether it will rebound with US stocks to form a “new cycle” or continue to crash and confirm a “legacy cycle” after consolidation depends on the interplay of internal and external factors and market reactions.

In terms of capital, the outlook is relatively optimistic. Data shows that fund inflows this week did not change significantly, but last week, Strategy added over $900 million in BTC, and Bitmine significantly increased ETH holdings, boosting market confidence.

Cryptocurrency capital inflow/outflow statistics (weekly)

Among them, BTC ETF and ETH ETF channels, which hold significant influence over crypto asset prices, both recorded positive inflows totaling over $500 million.

On the sell side, the situation is slightly pessimistic. Last week, combined long and short positions sold over 157,000 BTC, exceeding the scale of the previous two weeks. As selling increased, exchange outflows also slightly decreased.

Exchange sell and inflow/outflow statistics (weekly)

Long-term holders continue to sell. The influence of the historical cycle curse on this group remains profound. If they cannot return to accumulation, BTC prices may struggle to stabilize.

On the industry level, positive developments are also advancing. The CFTC announced the launch of a digital asset pilot program, allowing regulated derivatives markets to use BTC, ETH, and USDC as collateral, with stricter monitoring and reporting mechanisms. This breakthrough in using crypto assets as collateral for derivatives is beneficial for the integration of DeFi and CeFi, expanding crypto application scenarios and providing long-term benefits. Additionally, the highly anticipated “structural plan” has reportedly made some progress and received unanimous support from both Democrats and Republicans. The final passage of this bill will further promote the development of the crypto industry in the US and encourage more institutional allocation.

Cycle indicators

According to eMerge Engine, EMC BTC Cycle Metrics indicator is 0, entering a “downtrend” (bear market).