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Crypto crashes 13 per cent as Fed rate cut hopes fade, S&P 500 correlation hits 0.95

Crypto crashes 13 per cent as Fed rate cut hopes fade, S&P 500 correlation hits 0.95

Over the past 24 hours, the crypto market shed 3.51 per cent, extending a punishing 13 per cent weekly decline driven by a confluence of macroeconomic headwinds, cascading derivatives liquidations, and a dramatic collapse in trader sentiment. This sell-off exemplifies how tightly interwoven crypto has become with traditional financial systems, particularly as correlations with equities have deepened to levels not seen in months.

Monday’s performance in US equities underscored this linkage, with the Dow Jones falling 1.18 per cent, the S&P 500 down 0.92 per cent, and the Nasdaq slipping 0.84 per cent, as technology stocks led the retreat. These losses emerged alongside diminishing expectations for a Federal Reserve rate cut in December, which had previously provided some support to risk assets. The recalibration of Fed expectations followed strong US economic data, which reinforced concerns about persistent inflation and delayed the anticipated pivot toward monetary easing.

The shifting macroeconomic landscape was further reflected in movements across fixed-income and foreign exchange markets. The 10-year US Treasury yield declined modestly by 1.0 basis point to settle at 4.139 per cent, while the two-year yield edged higher by 0.4 basis points to 3.610 per cent, signalling a slight flattening of the yield curve. Meanwhile, the US Dollar Index gained 0.29 per cent to close at 99.588, adding pressure on non-dollar assets.

Gold, often viewed as a safe haven, dropped 1.0 per cent to US$4044.96 per ounce, weighed down by both the stronger dollar and receding hopes for near-term rate cuts, which typically support precious metals by lowering opportunity costs. In energy markets, Brent crude settled slightly lower at US$64.20 per barrel, recovering marginally as loadings resumed at Russia’s Novorossiysk export terminal following a brief suspension caused by a Ukrainian drone strike. Across Asia, equities finished the session mixed but turned lower in early Tuesday trading, though US index futures pointed to a modest recovery at the open, suggesting some short-term stabilisation may be on the horizon.

The crypto downturn lies a powerful macro risk-off dynamic that has pulled digital assets into the same downdraft affecting equities. Over the past 24 hours, Bitcoin’s price correlation with the S&P 500 surged to 0.95, its highest since June 2025. This near-perfect synchronisation underscores how traders increasingly treat crypto not as an uncorrelated alternative asset but as a high-beta extension of the broader risk spectrum. The catalyst for this shift came from revised market pricing around Federal Reserve policy. Stronger-than-expected economic indicators have tempered expectations for a December rate cut, pushing the implied probability lower and driving the 10-year Treasury yield up by 14 basis points over recent sessions.

This tightening of financial conditions has hit speculative assets especially hard. Bitcoin’s breach below the psychologically critical US$91,500 level triggered a wave of algorithmic stop-loss orders, accelerating the decline and dragging down major altcoins such as Solana and Cardano, which posted weekly losses of 21.7 per cent and 22.4 per cent, respectively. The market now awaits pivotal upcoming events, the release of the November 20 Fed meeting minutes, and Nvidia’s earnings report on November 21, for further directional cues. Any sign of continued economic resilience or hawkish Fed rhetoric could prolong risk aversion.

Compounding the macro pressure, a violent unwind in crypto derivatives markets has magnified losses through forced liquidations. Trading volume in perpetual futures contracts spiked by 45.6 per cent to an astonishing US$423 trillion over 24 hours, reflecting frantic hedging and position adjustments. Simultaneously, total open interest in the derivatives market fell by 7.4 per cent, now standing at US$787 billion, down 8.4 per cent in a single day. This contraction signals a rapid deleveraging as overextended positions were forcibly closed. Options markets mirrored this bearish sentiment, with US$740 million in put options placed targeting a Bitcoin price of US$90,000 and Ethereum at US$2,800.

Funding rates for major altcoins also turned negative, with the average rate dipping to minus 0.0019775, which disincentivises holding long positions and encourages further shorting. This feedback loop of rising volatility, liquidations, and negative funding creates a self-reinforcing cycle that can deepen sell-offs beyond what fundamentals alone would justify. Market participants now watch open interest closely, as a continued decline could signal capitulation, potentially setting the stage for a relief rally once leverage is sufficiently purged.

Perhaps most telling is the collapse in market psychology, captured starkly by the Crypto Fear & Greed Index, which plunged to 15, entering “Extreme Fear” territory. This marks the lowest reading since March 2025, a period that ultimately coincided with a market bottom when Bitcoin found support near US$76,000. Retail investors, overwhelmed by the speed and severity of the decline, have fled to the perceived safety of stablecoins, pushing Tether’s dominance to 7.2 per cent, a 30-day high. Social sentiment has turned sharply negative, with average daily scores falling to 4.29 out of 10, and viral commentary reflecting deep pessimism toward even leading altcoins.

Phrases like “Solana’s fuel is running out” have gained traction, illustrating how quickly narrative momentum can reverse in stressed markets. Historically, sustained readings below 20 on the Fear & Greed Index have often preceded short-term bounces, as excessive fear creates oversold conditions ripe for contrarian positioning. However, such rebounds typically require a catalyst, and in the current environment, that catalyst remains uncertain.

Technically, Bitcoin’s daily RSI has plummeted to 9.05, a level that suggests extreme oversold conditions rarely seen outside major market dislocations. This raises the possibility of a reflexive bounce, particularly if macro conditions stabilise or if institutional buyers step in near key support levels. El Salvador recently deployed over US$100 million in purchases at the US$90,000 level, suggesting strong hands view this zone as a strategic entry point. Whether Bitcoin can hold this critical threshold in the face of ongoing liquidations and macro uncertainty will likely determine near-term market direction.

In summary, the current crypto sell-off is not an isolated event, but rather part of a broader reassessment of risk across global markets. It reflects the convergence of three powerful forces: a macro regime shift driven by sticky inflation and delayed monetary easing, a violent derivatives-driven deleveraging, and a collapse in market sentiment that has pushed fear to multi-month extremes.

While technical indicators hint at potential exhaustion, any sustainable recovery will depend on a stabilisation in equity markets, a reduction in liquidation pressure, and a recalibration of Fed expectations. Until then, the path of least resistance for crypto remains downward, with US$90,000 standing as the last line of defence before deeper levels come into play.

 

Source: https://e27.co/crypto-crashes-13-per-cent-as-fed-rate-cut-hopes-fade-sp-500-correlation-hits-0-95-20251118/

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

43 per cent chance of a Fed rate cut isn’t enough: Markets brace for a volatile December

43 per cent chance of a Fed rate cut isn’t enough: Markets brace for a volatile December

We are caught between the surging optimism of the AI revolution and the sobering reality of a Federal Reserve that shows no immediate signs of pivoting toward monetary easing. The dominant narrative of the past six months, a powerful rally in US equities that saw the S&P 500 climb a robust 21 per cent from April through October, has now run into a wall of technical resistance and macroeconomic uncertainty. This creates a delicate and precarious balance for investors, who must navigate a market that is technically stretched, fundamentally challenged by a lack of broad-based participation, and now facing its first major test of conviction since the rally began.

The S&P 500’s impressive run, which brought its year-to-date return to over 30 per cent by mid-November, has been almost exclusively driven by the so-called Magnificent Seven technology giants. Their valuations, trading at more than 30 times earnings, are a clear signal that the market’s gains have been concentrated in a narrow cohort of AI beneficiaries. This dynamic echoes the excesses of the dotcom era.

This concentration creates a fragile foundation. The index now struggles at its 50-day moving average, a key technical level that often acts as a barometer of short-term sentiment. A failure to break through this resistance, especially after such a strong run, suggests that much of the easy money has been made and that further upside will be limited and hard-fought. Historical seasonal trends support this cautious view, as the final two months of the year typically offer only marginal gains following such a powerful rally.

The single most important event for the market’s immediate trajectory will be Nvidia’s earnings report on November 19. As the undisputed leader in AI chips, Nvidia has become the canary in the coal mine for the entire AI investment thesis. Its guidance on future demand, data center growth, and gross margins will be scrutinised for any sign of a slowdown in the frenzied spending by hyperscalers and tech firms. A strong beat and bullish outlook could provide a final burst of momentum to push the S&P 500 to new highs before year-end. Conversely, any hint of a demand deceleration or a more challenging competitive landscape would likely trigger a broad-based selloff, as it would call into question the core engine of the market’s gains over the past year.

Compounding this technical and earnings-driven anxiety is the shifting landscape of monetary policy. The Federal Reserve’s stance has become a primary source of near-term worry. Markets had been pricing in a high probability of a rate cut at the December meeting, but recent strong economic data, particularly in the labour market, have forced a dramatic reassessment. The odds of a December rate cut have now fallen to just 43 per cent, a coin flip at best. This sudden withdrawal of expected liquidity is a major headwind for risk assets. The implications are clear in the bond market, where the 10-year Treasury yield has climbed to 4.148 per cent, and in the foreign exchange market, where the US Dollar Index has strengthened to 99.299. A strong dollar and high yields are a toxic combination for global growth and for expensive, long-duration assets like technology stocks.

This environment of Fed uncertainty makes a barbell investment strategy particularly prudent. On one end, investors should retain exposure to high-quality, large-cap growth companies that are genuine AI leaders with strong balance sheets and clear paths to monetisation. On the other end, they should anchor their portfolios with resilient, high-quality dividend payers. These companies, often found in sectors like consumer staples and utilities, provide a steady income stream and act as a ballast during periods of market volatility and economic doubt. This dual approach allows investors to participate in the ongoing AI narrative while simultaneously protecting their capital from the potential fallout of a hawkish Fed.

The contrast between the US and emerging markets is also becoming more stark. While US valuations are stretched and corporate profit margins are at or near peak levels, many emerging markets offer a more compelling long-term risk-reward profile. Within this group, China remains a complex and challenging investment case, plagued by issues of capital misallocation and intense domestic competition. However, a selective approach is warranted. Chinese technology firms with a strong international footprint and a capacity for overseas expansion present a unique opportunity, as do high-quality dividend-paying stocks that can provide stability in an otherwise volatile market. The key is to avoid broad, passive exposure and instead focus on specific, well-managed companies that can navigate the domestic headwinds and capitalise on global opportunities.

The cryptocurrency market, deeply intertwined with the Nasdaq and broader risk sentiment, has been a stark reflection of this growing macro anxiety. Over the past 24 hours, the market has fallen 0.62 per cent, continuing a brutal 12 per cent monthly decline. The sentiment, as measured by the Fear & Greed Index, has plunged into the zone of “Extreme Fear,” registering a level of 17. A cascade of forced selling has amplified this fear.

In just four hours, over US$200 million in leveraged long positions were liquidated, creating a vicious feedback loop where falling prices triggered more margin calls, which in turn forced more selling. The unwinding of excessive leverage has left the market technically in a state of disrepair. The total crypto market cap has now fallen below its 200-day exponential moving average of US$3.63 trillion, confirming a bearish market structure.

The primary catalyst for this crypto selloff has been the same macro uncertainty plaguing traditional markets: the fading hope for imminent Fed rate cuts. As the odds for a December cut dropped to 44 per cent, the correlation between Bitcoin and the Nasdaq surged to 0.86, confirming that crypto is once again being traded as a high-beta risk asset. This has been compounded by a significant outflow of institutional capital, with Bitcoin ETFs experiencing US$1.1 billion in weekly outflows and a sharp 33 per cent monthly decline in stablecoin reserves, indicating a severe contraction in available trading liquidity. The market’s fragility was further exposed by a piece of news from Japan, where a proposal to slash the punitive crypto tax rate from 55 per cent to a more reasonable 20 per cent actually triggered short-term profit-taking. Investors, wary of any regulatory change, used the news as an excuse to exit positions, demonstrating how any event can become a catalyst for selling in such a risk-averse environment.

The key question now for the cryptocurrency market is whether a major technical support zone can hold. Analysts are closely watching the US$88,000 to US$90,000 range for Bitcoin. A decisive break below this level could unleash a wave of further liquidations, potentially totaling US$5.5 billion in short-term positions.

The market’s fate, much like that of the S&P 500, is now hostage to the same macro forces. Until there is greater clarity on the Fed’s path or a major, definitive catalyst, both traditional and digital asset markets are likely to remain range-bound and volatile, caught in a tense stalemate between the powerful promise of a new technological era and the immediate, sobering reality of a central bank determined to keep a tight grip on its monetary policy.

 

Source: https://e27.co/43-per-cent-chance-of-a-fed-rate-cut-isnt-enough-markets-brace-for-a-volatile-december-20251117/

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

Crypto’s perfect storm: Broken support, hawkish Fed, and Nasdaq lockstep

Crypto’s perfect storm: Broken support, hawkish Fed, and Nasdaq lockstep

The confluence of macro uncertainty, technical breakdowns, and sector-specific stressors has created a volatile environment that tests the resilience of risk assets across the board. This turbulence lies behind Bitcoin’s breach of the US$100,000 level, a psychological and structural support that, once broken, triggered a cascade of leveraged liquidations totaling US$1.3 billion.

This event did not occur in isolation. Instead, it amplified and was amplified by broader financial dynamics, especially the tightening correlation between crypto and equities, particularly the Nasdaq-100, which reached an unusually high 0.95 over the past 24 hours. These developments, layered atop structural pressures in Bitcoin mining and shifting monetary policy expectations, signal more than just a routine correction. They reflect deeper questions about crypto’s role in a risk-on/risk-off world and the sustainability of its recent rally.

The breakdown below US$100,000 marks a pivotal moment for Bitcoin’s price trajectory. This level had served not only as a price anchor but also as a signal of institutional confidence and market maturity. Its breach suggests that sentiment has soured rapidly, possibly due to a combination of overextended positioning and macro headwinds.

The data underscores this fragility. Open interest in Bitcoin derivatives rose 4.21 per cent immediately before the drop, indicating a dense concentration of long positions that were suddenly exposed when the market turned. In leveraged markets, such crowded trades can magnify price moves exponentially, as margin calls force further selling into a thin market. The resulting feedback loop accelerated the decline and pushed many positions underwater. Now, all eyes are on the 200-day exponential moving average around US$95,000. Should Bitcoin stabilise above this level, it could signal that the worst of the liquidation cascade has passed. But a failure to hold would likely invite another wave of forced deleveraging, especially if broader risk sentiment continues to deteriorate.

Compounding this technical vulnerability is the reassertion of crypto’s tie to equity markets, particularly to the Nasdaq. The 0.95 correlation with the Nasdaq-100 over 24 hours, its highest since June 2025, confirms that institutional participants continue to treat crypto as a risk-on proxy rather than a distinct asset class. This linkage became especially pronounced as technology shares sold off sharply, with the Nasdaq dropping 2.29 per cent amid concerns over AI-related earnings and the fading likelihood of near-term Federal Reserve rate cuts.

According to the CME FedWatch Tool, the probability of a rate cut by January 2026 has collapsed to just 20 per cent, down from 49 per cent a week earlier. This shift reflects increasingly hawkish commentary from Fed officials, who appear reluctant to ease policy despite the recent government shutdown and market volatility. For crypto markets, this means less near-term tailwind from monetary policy and more sensitivity to equity market swings. As long as institutional capital flows remain dictated by macro liquidity expectations, crypto will struggle to decouple from the broader risk narrative.

Adding another layer of pressure is the growing distress in the Bitcoin mining sector. Bitfarms’ announcement that it plans to exit mining by 2027 after reporting a US$46 million quarterly loss highlights the mounting economic challenges facing miners. The company cited unsustainable energy costs and declining profitability, conditions exacerbated by a 41 per cent drop in industry-wide mining revenue since October. Historically, miners have been consistent sellers of Bitcoin, liquidating approximately 1,000 BTC per day to cover operational expenses. As margins compress, this selling pressure could intensify, especially if more miners follow Bitfarms’ strategic pivot toward AI infrastructure. While such transitions may make business sense in the long run, they erode near-term confidence in Bitcoin’s network fundamentals. A sustained decline in network hashrate would be a red flag, signaling that more miners are capitulating under financial stress. This dynamic not only increases selling pressure but also raises concerns about network security and decentralization if smaller operators are forced offline.

The macro backdrop adds further complexity. Although the US government has resumed operations after a 43-day shutdown, the resolution offers little clarity on fiscal sustainability or the path of monetary policy. Markets initially welcomed the end of the impasse, but this relief was short-lived as investors refocused on the Fed’s tightening stance. The modest rise in Treasury yields, 10-year yields climbing to 4.11 per cent and two-year yields to 3.59 per cent, reflects both the removal of shutdown-related uncertainty and a reassessment of rate cut probabilities. Meanwhile, gold declined 1.1 per cent to US$4,151.86 per ounce, suggesting that safe-haven demand weakened as the immediate fiscal crisis abated. The dollar also dipped slightly, closing at 99.16, but this move appears more technical than fundamental. Crucially, Friday’s upcoming US Producer Price Index (PPI) data will serve as a litmus test for inflation expectations. Should the data come in hotter than anticipated, it could further delay rate cut hopes and extend the selloff across risk assets, including crypto.

Within this environment, sentiment has plunged into Extreme Fear, as reflected by a Fear & Greed Index reading of 22. Historically, such extremes have often marked contrarian buying opportunities, especially in crypto markets where panic selling tends to overshoot fundamentals. However, the current context may be different. Unlike previous fear-driven corrections, today’s selloff emerges against a backdrop of structural shifts, a re-tethering to equity markets, miner distress, and a less accommodative macro regime. These factors suggest that the usual buy the dip narrative may not apply, at least not immediately. For long-term believers in Bitcoin’s value proposition, the current pullback could represent a strategic entry point, but only if one assumes that the macro environment will eventually ease and that mining sector stress is transitory. Short-term traders, on the other hand, must contend with the very real possibility of further downside if equities continue to lead the move or if miner selling accelerates.

In conclusion, this market wrap captures more than a routine correction. It reflects a convergence of technical, macro, and sector-specific pressures that challenge crypto’s independence as an asset class. Bitcoin’s fall below US$100,000, its tight correlation with the Nasdaq, and the exodus from mining all point to a moment of reckoning. The path forward hinges on whether crypto can reassert its unique narrative, decouple from equities, absorb miner sell pressure, and regain institutional confidence in a higher-for-longer rate environment.

Until then, volatility will remain elevated, and the market will stay at the mercy of macro crosscurrents and technical thresholds. Traders and investors alike must navigate this terrain with caution, recognising that the current fear may be justified, but also that in crypto, fear often plants the seeds of the next bull run.

 

Source: https://e27.co/cryptos-perfect-storm-broken-support-hawkish-fed-and-nasdaq-lockstep-20251114/

 

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