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Nasdaq tumbles, but Bitcoin soars past US$97K on massive short squeeze

Nasdaq tumbles, but Bitcoin soars past US$97K on massive short squeeze

Markets entered a period of recalibration as US equities extended their losses for a second straight session amid shifting investor sentiment and geopolitical developments. The tech-heavy Nasdaq Composite led the retreat, falling one per cent to close at 23,471.75, while the S&P 500 dropped 0.53 per cent and the Dow Jones Industrial Average edged down just 0.09 per cent.

This rotation out of high-flying technology names reflected growing concerns about stretched valuations, compounded by external pressures such as China’s new restrictions on US cybersecurity software, which directly affect semiconductor giants like Nvidia and Broadcom. Investors appeared to favour economically sensitive sectors over growth-oriented tech, signalling a potential pivot in market leadership early in the year.

Global markets showed more resilience on January 15. Asian and European equities traded mixed or slightly higher, buoyed by optimism around artificial intelligence applications and signs that deflationary pressures may be easing in key economies. This divergence underscored a nuanced global outlook. While US markets grappled with domestic policy uncertainty and sector rotation, international investors focused on forward-looking catalysts in AI adoption and macroeconomic stabilisation.

Commodities and currencies also reflected this transitional mood. Crude oil prices plunged nearly three per cent, with West Texas Intermediate settling around US$60.22 per barrel after President Trump adopted a less confrontational tone toward Iran, alleviating fears of supply disruptions that had driven a five-day rally. Precious metals pulled back modestly from record highs, with spot gold hovering near US$4,610 per ounce. The US dollar held steady against the euro at approximately 0.85915 EUR per USD, suggesting stable foreign exchange dynamics despite underlying volatility in risk assets.

In stark contrast to the equity pullback, the crypto market advanced 0.89 per cent over the past 24 hours, extending a seven-day rally that has delivered a cumulative gain of 4.86 per cent. This momentum stemmed primarily from two powerful forces: a decisive technical breakout in Bitcoin and a surge in institutional demand through spot ETFs. Bitcoin shattered the US$95,000 resistance level that had contained its price action since December, climbing to US$97,000 on heightened volume.

The move triggered US$588 million in short liquidations, the largest since November 2025, fuelling a classic short squeeze that amplified upward momentum. With the Relative Strength Index now at 75.42, the asset sits in overbought territory, and traders remain fixated on the psychological US$100,000 milestone.

Simultaneously, institutional appetite reemerged with remarkable force. On January 13, spot Bitcoin ETFs recorded US$753.7 million in net inflows, the highest single-day total since October 2025. BlackRock’s IBIT fund alone attracted US$391 million, reinforcing the narrative that large financial players continue to view Bitcoin as a strategic macro hedge rather than a speculative instrument. This renewed confidence from traditional finance provided critical support amid lingering retail caution, effectively anchoring the broader crypto rally.

Sentiment metrics corroborated this shift. The Fear & Greed Index climbed to 54, moving from “Fear” into “Neutral” territory, up 11 points from the prior week. This improvement suggests that market participants are regaining composure after weeks of uncertainty, creating fertile ground for altcoin participation alongside Bitcoin’s leadership.

In my view, this moment marks a pivotal inflection point in the evolving relationship between traditional and digital asset markets. While US equities undergo a necessary correction, particularly in the overvalued tech sector, crypto is demonstrating increasing maturity through institutional validation and technical conviction. The juxtaposition is telling.

As political scrutiny intensifies around the Federal Reserve and banking regulations, and as geopolitical risks temporarily recede, capital seeks alternatives that offer both asymmetric upside and structural independence. Bitcoin’s breakout above US$95,000 is not merely a price event. It is a signal that the asset class is increasingly decoupling from short-term equity volatility and asserting its role within diversified portfolios.

Sustainability remains contingent on price holding key support. A failure to maintain levels above US$96,000 could invite profit-taking, especially given the elevated RSI. For now, the confluence of technical momentum, institutional flows, and improving sentiment paints a cautiously optimistic picture. Crypto’s rally may persist even as traditional markets navigate choppy waters.

 

Source: https://e27.co/nasdaq-tumbles-but-bitcoin-soars-past-us97k-on-massive-short-squeeze-20260115/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The great crypto disconnect: US inflation drops, but BTC keeps falling

The great crypto disconnect: US inflation drops, but BTC keeps falling

While Asian equities celebrated renewed optimism following softer-than-expected US inflation data, the cryptocurrency market entered another phase of retreat, weighed down by a confluence of structural and behavioural forces that signal a deeper realignment in investor sentiment. The MSCI Asia Pacific Index rose 0.6 per cent, buoyed by semiconductor leader TSMC and SoftBank Group, and Japan’s Nikkei 225 climbed 1.1 per cent ahead of a highly anticipated Bank of Japan policy decision.

This regional strength stemmed directly from the US Consumer Price Index’s unexpected drop to 2.7 per cent in November, well beneath the forecasted 3.1 per cent and marking the weakest annual gain since early 2021. Markets interpreted this data as a green light for Federal Reserve rate cuts in 2026, injecting fresh momentum into risk assets across Asia.

At the same time, crypto experienced a further 0.79 per cent decline over the past 24 hours, extending its seven-day slide to 7.57 per cent. This divergence underscores a critical transformation underway. Bitcoin and other digital assets are no longer moving in lockstep with macro liquidity signals or tech-sector sentiment. Instead, they face internal pressures so profound that even historically supportive macro backdrops fail to provide a floor.

Gold surged to an all-time high of US$4330 per ounce, while silver breached US$66 per ounce, levels never before seen in financial history. This shift toward metals reflects a pronounced change in risk perception among institutional and retail investors alike. Unlike in previous cycles, when crypto often benefited from expectations of monetary easing or inflation fears, today’s capital flows into tangible, state-endorsed stores of value rather than decentralised alternatives.

Bitcoin, despite its decade-long narrative as digital gold, has failed to capture this demand. Year-to-date, it is down approximately 8 per cent, and its price correlation with the Nasdaq-100 has weakened to a near-zero 24-hour correlation coefficient of negative 0.03. This decoupling reveals a troubling reality. Crypto’s identity as a risk-on asset is being challenged not only by external macroeconomic conditions but also by its own inability to serve as a reliable hedge during periods of economic uncertainty. Investors now seem to view gold and silver, rather than bitcoin, as the primary beneficiaries of monetary instability, geopolitical tensions, and inflation volatility.

Compounding this macro-level rejection is a relentless wave of selling from bitcoin’s most steadfast cohort, long-term holders. According to available data, nearly US$300 billion worth of bitcoin that had remained dormant for over one year re-entered active circulation in 2025 alone. This represents the largest distribution by long-term holders since 2020 and includes approximately 1.6 million coins that had been untouched for at least two years. The significance of this behaviour cannot be overstated. These are not speculative traders reacting to short-term volatility. They are early adopters, whales, and conviction-driven investors who have weathered multiple market cycles. Their decision to sell suggests a fundamental reassessment of bitcoin’s near-term trajectory.

This exodus has coincided precisely with bitcoin’s 30 per cent decline from its October peak of US$126000, indicating that the selling pressure is not merely a reaction to price drops but a driving force behind them. The phenomenon resembles a slow bleed, a steady offloading into thin order books that lacks the drama of a crash but inflicts sustained downward pressure. With the 24-hour Relative Strength Index sitting at 36.36, just above the oversold threshold of 30, the market teeters on the edge of potential capitulation. If that support breaks, a deeper correction could follow, particularly if long-term holders accelerate their distributions.

Further amplifying the downside has been a wave of forced liquidations in the derivatives market. Over the past 24 hours, US$176 million in bitcoin positions were liquidated, with long positions accounting for 66 per cent of those losses, a clear sign of leveraged bullish bets being unwound. This liquidation cascade acted as a multiplier on the initial selling pressure, pushing prices lower in a feedback loop that discouraged new buyers.

There is a silver lining in this deleveraging. Open interest in bitcoin perpetual futures has declined by four per cent, indicating that traders are reducing their leverage exposure. This deleveraging, while painful in the short term, lowers the systemic risk of a disorderly collapse. A less leveraged market is more resilient to flash crashes and more likely to stabilise once sentiment shifts. The immediate impact remains bearish, as each wave of liquidations reinforces the perception of weakness and deters momentum-driven capital from entering.

What makes this moment particularly significant is the behaviour of capital within the crypto ecosystem itself. Bitcoin dominance now stands at 59.36 per cent, a three-month high, which might superficially suggest strength. In reality, it reflects a broader flight from the asset class altogether, not a rotation into bitcoin from altcoins, but a wholesale exit from crypto in favour of traditional safe havens. Investors are not reallocating within digital assets. They are withdrawing from them. This trend raises an urgent question for the coming months.

Can institutional inflows through spot ETFs offset the sustained outflow from long-term holders? Some analysts argue that institutional participation, fuelled by ETF approvals and allocations from major financial firms, is already reducing bitcoin’s volatility, citing a 68 per cent price swing in 2025 compared to Nvidia’s 120 per cent as evidence of maturation. That theoretical stability means little when real-time price action tells a story of persistent selling and broken technical levels.

In conclusion, the US$2.88 trillion market capitalisation level, derived from key Fibonacci retracement levels, emerges as a critical support zone. A decisive close below this threshold could trigger an additional five to seven per cent drop as algorithmic trading models and risk-managed portfolios recalibrate their exposure. Conversely, a firm hold above this level, combined with signs of stabilisation in long-term holder behaviour and renewed ETF inflows, could set the stage for a relief rally. For now, the path of least resistance remains downward.

The confluence of safe-haven rotations, veteran investor profit-taking, and derivatives deleveraging has created a perfect storm that even favourable macro news from the US CPI cannot immediately dispel. Bitcoin may be maturing with respect to volatility metrics, but maturity also entails facing the consequences of market-structure shifts without the artificial buoyancy of speculative fervour.

The next few weeks, especially in the wake of the Bank of Japan’s policy decision and continued Fed commentary, will determine whether this correction marks a temporary pause in a structural bull market or the beginning of a more prolonged reassessment of crypto’s role in a post-rate-hike, risk-conscious world.

 

Source: https://e27.co/the-great-crypto-disconnect-us-inflation-drops-but-btc-keeps-falling-20251219/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Fed cuts rates but crypto plunges: The liquidity trap no one’s talking about

Fed cuts rates but crypto plunges: The liquidity trap no one’s talking about

The market rally following the Federal Reserve’s third consecutive 25 basis point interest rate cut of 2025 appears, at first glance, to signal renewed optimism across traditional asset classes. Equities responded positively, with the Dow Jones rising 1.05 per cent, the S&P 500 gaining 0.67 per cent, and the Nasdaq closing up 0.33 per cent. Bond yields retreated in tandem, with the 10-year US Treasury yield falling more than three basis points to 4.15 per cent and the two-year yield dropping over seven basis points to 3.54 per cent.

The dollar weakened broadly, especially against the yen, which gained ground as markets priced in a potential Bank of Japan rate hike in December. Even commodities reflected a cautious optimism, with Brent crude ticking up 0.44 per cent to US$62.21 per barrel amid heightened geopolitical tensions, and gold climbing 0.7 per cent to US$4236.57 per ounce as a defensive hedge.

Beneath this surface calm, the cryptocurrency market tells a very different story. Bitcoin and the broader digital asset complex declined by 2.82 per cent over the past 24 hours, extending a 14.1 per cent monthly drawdown. The Fed’s latest policy manoeuvre, which also included an announcement of US$40 billion in monthly Treasury purchases commencing December 12, effectively a stealth quantitative easing program, failed to ignite bullish sentiment in crypto.

Instead, the market interpreted the move not as a bold affirmation of economic strength, but as a reactive response to deteriorating growth prospects and mounting stagflationary pressures. This perception has triggered a significant reallocation of risk within crypto, where investors are abandoning speculative altcoins in favor of Bitcoin’s relative stability, pushing Bitcoin dominance to 58.54 per cent, a 30-day increase of 1.77 percentage points.

The disconnect between traditional markets and crypto hinges on liquidity expectations, leverage dynamics, and the unique structural vulnerabilities of digital asset markets at this point in the cycle. Unlike equities, which benefit from long-standing institutional infrastructure and predictable seasonal flows, crypto markets operate in a more volatile, sentiment-driven ecosystem that is acutely sensitive to shifts in macro liquidity, especially near year-end.

Analysts such as Adam from Greeks.live have highlighted the historical tendency for crypto liquidity to dry up in the final weeks of the calendar year. This seasonal tightening amplifies any macro uncertainty, turning minor corrections into cascading liquidations when leverage is high.

And leverage was indeed high. Over the past 24 hours alone, US$94 million in long positions were liquidated in Bitcoin markets, with 61 per cent of those forced closures hitting leveraged longs. Total open interest across crypto derivatives markets contracted by 4.34 per cent, while perpetual funding rates, though nominally positive at +0.0023 per cent, failed to provide meaningful price support.

The US$1.25 trillion in daily derivatives volume, a 14.3 per cent increase day-over-day, did not reflect fresh accumulation or conviction buying, but rather panic-driven unwinding by retail traders who had overextended during Bitcoin’s November rally. This dynamic underscores a fragile market structure, one that rallies on euphoria but collapses rapidly when sentiment shifts, especially in the absence of strong institutional demand.

The exodus from altcoins further illustrates this risk-off posture. Tokens like Solana and Sui, which had previously benefited from speculative inflows during periods of macro complacency, dropped between five and eight per cent as investors rotated into Bitcoin. The Altcoin Season Index now stands at just 17, deep in “Bitcoin Season” territory. This flight to safety within the crypto ecosystem mirrors broader macro trends, where institutions are trimming high-beta exposures ahead of anticipated volatility in 2026.

Notably, the 30-day correlation between crypto and the Nasdaq-100 has climbed to +0.48, while Bitcoin’s 24-hour correlation with the index sits at +0.39. These figures confirm that crypto is no longer operating in a vacuum; it is increasingly tethered to the same macro anxieties that drive equity markets, particularly around interest rate trajectories, inflation persistence, and growth sustainability.

From a strategic standpoint, this environment demands a reassessment of traditional crypto narratives. For years, proponents argued that digital assets would decouple from legacy markets and serve as an alternative store of value or inflation hedge. The data from this latest cycle suggests the opposite. Crypto’s fate remains tightly bound to US monetary policy and risk sentiment.

The Fed’s decision to cut rates while simultaneously launching asset purchases should, in theory, have flooded the system with liquidity and supported risk assets. Markets read between the lines. The fact that the Fed felt compelled to act while growth indicators remain ambiguous signals underlying weakness, not strength. In such conditions, capital gravitates toward assets with the clearest fundamentals and deepest liquidity, which, within crypto, means Bitcoin and little else.

Looking ahead, two critical levels will determine whether this selloff evolves into a deeper correction or merely a year-end consolidation. First, Bitcoin must hold the US$89,500 support level. A decisive break below this threshold could trigger cascading margin calls, especially given the elevated leveraged positioning still present in the market. Second, the ETH/BTC ratio, currently at 0.0214 and nearing 2025 lows, will serve as a barometer for altcoin sentiment. A sustained rebound above this level could indicate that risk appetite is returning to the broader ecosystem.

The central question now is whether January’s traditional “risk-on” seasonal patterns, historically a strong period for crypto due to post-holiday capital reallocation and tax-loss harvesting reversals, will be powerful enough to override the macro headwinds building for 2026.

With the Fed Funds Target Rate now at 3.50 to 3.75 per cent and further cuts anticipated in the second and third quarters of 2026, bringing the rate down to 3.25 per cent by year-end, the path of monetary policy appears accommodative on paper. If inflation proves sticky or growth falters further, even these cuts may not suffice to restore confidence in risk assets.

In this context, the crypto market’s reaction to the latest Fed move reflects not just short-term technical weakness, but a deeper reassessment of its role in the global financial system. As institutional adoption matures, digital assets are shedding their reputation as a purely speculative frontier and becoming subject to the same macro forces that govern traditional markets.

That integration brings legitimacy, but also vulnerability. For investors navigating this transition, the key will be distinguishing between structural value and cyclical noise, and recognising that in times of uncertainty, even within a decentralised ecosystem, capital seeks safety first, innovation second.

 

Source: https://e27.co/fed-cuts-rates-but-crypto-plunges-the-liquidity-trap-no-ones-talking-about-20251211/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j