[1] Introduction
This week, the market is showing signs of a weak rebound, despite continued expectations of a year-end rally.
But beneath this comfortable atmosphere, warning signs are emerging that this may be a "liquidity illusion" rather than a true rally.
It's time to consider the nature of this rebound and whether it's a "buy" rebound or an "escape" exit.
[2] Market Internal Analysis ① (Price-Asset Structure)
Despite a slight rebound in Bitcoin and Ethereum, the performance of top-cap altcoins remains mixed. Only a few, such as Ripple, Solana, and Cardano, are showing slight gains, while Dogecoin, Tron, and BNB continue to decline. While the market appears to be in the early stages of recovery, the underlying structure reveals a entrenched, dominant-weak dynamic.
In particular, Bitcoin fell sharply from its all-time high of $94,000 resistance and then broke below the $86,000 support level. The rebound was also driven by individual investors. The number of whale addresses holding more than 1,000 BTC decreased by 3.2% in one month, and those holding 100-1,000 BTC also decreased by 1.5%. Conversely, the number of holders of 0.01-1 BTC has been steadily increasing. This suggests that individual "bargain buying" is structurally being suppressed by "fractional liquidations" by institutions and whales.
[3] Market Internal Analysis ② (Liquidity/Fund Flow)
Both ETF flows and stablecoin indicators cast doubt on the liquidity of the rebound. Bitcoin spot ETFs in the US experienced a net outflow of 254 billion won for the fifth consecutive day, while Ethereum-based ETFs also saw an outflow of 550 million dollars. This suggests that this is not simply profit-taking, but rather the possibility of position liquidation or "year-end rebalancing" selling.
The stablecoin market capitalization remains at $287.2 billion, similar to the previous month. However, 24-hour trading volume plummeted by 27.5%, demonstrating a clear decline in liquidity. Notably, the ratio of stablecoin balances to Bitcoin has shown remarkable stability, suggesting a temporary pause in the tight supply-demand balance. In other words, it's still a "battleground between sellers at the top and buyers at the bottom," lacking any strong price momentum.
In addition to ETF outflows, there was a net outflow of $950 million across digital asset investment products. With the growing trend of traditional assets integrating with blockchain, such as the tokenized money market fund launched by JP Morgan, there is a possibility that the pure investment appeal of cryptocurrencies could decline in the short term.
[4] Macro variables or policy environment
The most significant change is "hawkish easing." The US Federal Reserve cut its benchmark interest rate in December, but simultaneously announced the resumption of monthly purchases of $40 billion in short-term Treasury securities. While this appears to be easing, the underlying message is closer to a temporary reprieve from tightening.
It's noteworthy that interest rate cuts are actually serving as a risk signal for the market. In particular, with the unemployment rate surpassing the Fed's forecast of 4.4% and reaching 4.6%, the market is moving from a simple "bad news is good news" phase to a "real recession" phase.
Despite inflation cooling faster than expected, expectations for further rate cuts are gradually fading as both corporate activity and consumer spending indicators are showing signs of slowing. In particular, the cryptocurrency regulation bill (CLARITY ACT), postponed until February next year, is also diluting expectations of institutional inflows and delaying the initial inflow of long-term funds.
[5] Conclusion
The key takeaway from this week's market is, "There's a rebound, but no money coming in." While a short-term technical rebound is possible, structurally, we're in a period of institutional capital outflows, stagnant liquidity, and an uncertain policy cycle.
A key variable next week is the massive Bitcoin options expiration (totaling $23.3 billion), which will be digested during the low liquidity period at the end of the year.
This reinforces the trend of reorganizing and controlling existing positions rather than creating direction, and it is highly likely that 'position adjustment' rather than price will be the main factor in fluctuations.
Amidst this, another point worthy of note is the signal of institutional capital's return. This is a time to closely monitor future ETF fund flows and the direction of the Fed's next monetary policy comments.
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