December 17th, 2025

Crypto’s fragile comeback: Technical relief meets macro uncertainty

The recent interplay between macroeconomic signals, regulatory shifts, and technical dynamics has placed the crypto market in a precarious but intriguing position. While traditional financial markets grapple with mixed labour data and shifting rate expectations, digital assets have staged a modest recovery, buoyed not by exuberance but by relief, tactical positioning, and emerging institutional frameworks. The 0.84 per cent rise in the crypto market over the past 24 hours appears deceptively simple, yet it encapsulates a much broader narrative about resilience amid structural uncertainty.

This rebound lies a classic technical phenomenon: the oversold bounce. The market’s RSI14 dipped to 31, flirting with the lower boundary of neutral territory and signalling that selling pressure had reached a temporary extreme. This condition attracted opportunistic traders, evidenced by a sharp 23 per cent surge in derivatives volume as participants sought to capitalise on discounted entry points. However, this surge came with a caveat. Open interest in perpetual and futures markets declined by 6.7 per cent, suggesting that while short-term speculators entered the fray, longer-term holders and leveraged participants remained cautious.

The MACD histogram, registering at a negative US$389 million, further underscored the absence of strong momentum behind the move up. Meanwhile, Bitcoin dominance held steady at 58.8 per cent, indicating that capital remained concentrated in the perceived safety of the flagship asset rather than rotating into riskier altcoins. This defensive posture reflects a market that is not yet convinced the worst is over, merely that it may have priced in the near-term pessimism.

Crucially, this technical bounce coincided with a notable policy development that may carry longer-term implications. Canada’s announcement of a forthcoming stablecoin regulatory framework for 2026 represents a rare moment of constructive clarity in an otherwise turbulent regulatory landscape.

Bank of Canada Governor Tiff Macklem emphasised that only stablecoins pegged one-to-one to central bank currencies and backed by high-quality liquid assets like Treasury bills would qualify as “good money.” This stance, while stringent, provides a clear benchmark for issuers and reassures institutions that Canada seeks to integrate stablecoins into its financial infrastructure rather than shun them outright.

In a global context where regulatory ambiguity has often stifled innovation, Canada’s approach, complemented by its Real-Time Rail payments system and open banking initiatives, positions the country as an emerging hub for compliant digital finance. This contrasts sharply with the United States, where legislative delays continue to weigh on sentiment.

While the US remains the largest market for crypto ETFs, its policy inertia creates a vacuum that other jurisdictions are beginning to fill. Canada’s proactive stance, though modest in immediate market impact, offers a glimpse of a more stable institutional pathway forward, particularly for payment-oriented stablecoins that could bridge traditional finance and Web3 ecosystems.

Optimism remains tempered by the realities of institutional flows and on-chain behaviour. Grayscale’s bullish outlook for Bitcoin in 2026, predicting new all-time highs, provides a compelling long-term thesis rooted in macro cycles and halving dynamics. This vision clashes with the short-term data emerging from ETF markets, which recorded US$1.11 billion in weekly outflows.

These outflows reflect investor caution in the face of rising macro uncertainty, including the mixed US jobs report that showed only 64,000 jobs added in November, barely above expectations, but a concerning rise in unemployment to 4.6 per cent, a four-year high. Such data complicates the Federal Reserve’s decision-making, diminishing hopes for aggressive rate cuts in early 2025 and indirectly pressuring risk assets.

In this environment, even bullish institutional narratives struggle to overcome near-term liquidity concerns. The pressure extended beyond Bitcoin, with Ethereum experiencing sharp derivatives liquidations after a single whale incurred a US$54 million unrealised loss on leveraged long positions. This episode highlights the fragility of leveraged exposure in times of volatility and the cascading effects that can ripple through the market when large positions unwind unexpectedly.

The broader macro backdrop further contextualises crypto’s cautious rebound. Asian equities declined broadly, with MSCI’s Asia-Pacific ex-Japan index falling 1.3 per cent to a three-week low. Japan’s Nikkei dropped 1.6 per cent ahead of a widely anticipated rate hike by the Bank of Japan, signalling a shift away from decades of ultra-loose monetary policy. Simultaneously, oil prices slumped below US$60 per barrel, their weakest level since May, driven by oversupply fears and speculation about potential peace talks between Russia and Ukraine.

The US dollar weakened across major currencies following the ambiguous jobs data, suggesting markets are recalibrating expectations for global monetary policy divergence. In such a landscape, crypto’s modest gain appears not as a flight to risk but as a relative stabilisation after excessive pessimism.

Looking ahead, the sustainability of this rebound hinges on several converging factors. Technically, a decisive move above the 7-day simple moving average at US$3.03 trillion in total market capitalisation would signal growing confidence. More critically, Bitcoin must reclaim the US$87,000 level, a psychological and liquidity-rich threshold tied to US$20.6 million in potential long liquidations.

A break above this mark could trigger a wave of short-covering and renewed institutional interest, especially if macro conditions begin to favour risk assets once more. The Fear and Greed Index remains at 25, deep in “fear” territory, suggesting that sentiment has not yet turned, but also that there is room for improvement should catalysts materialise.

Ultimately, the current rally is not a declaration of a new bull market but a measured recalibration. It emerges from a confluence of short-term technical exhaustion, selective regulatory progress in jurisdictions like Canada, and persistent institutional conviction in crypto’s long-term narrative. However, it operates within a fragile ecosystem marked by declining year-over-year trading volume, down 11.7 per cent, defensive capital rotation, and ongoing macro headwinds.

The market’s next move will depend less on isolated data points and more on whether these disparate forces can align, whether policy clarity can offset ETF outflows, whether macro easing can return, and whether on-chain leverage can stabilise. Until then, traders and investors alike remain in a holding pattern, watching closely for the first signs of durable conviction.

Source: https://e27.co/cryptos-fragile-comeback-technical-relief-meets-macro-uncertainty-20251217/

Anndy Lian

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

November 7th, 2025

Tech crash 2.0: AI hype meets labour reality as Nasdaq and Bitcoin tumble in tandem

At the heart of this turmoil lies a potent mix of deteriorating labour market conditions, evaporating liquidity in digital asset markets, and a sharp repricing of artificial intelligence-driven equity valuations that had been stretched to unsustainable levels. The data paints a coherent picture of a market losing its nerve, with investors rapidly rotating out of speculative assets and into safer havens, even as technical indicators flash warnings of oversold conditions that may soon invite a countertrend move.

The trigger for this week’s pullback was unequivocally the labour market report from Challenger, Grey & Christmas, which revealed that US-based employers announced 153,074 job cuts in October 2025. This figure represents a staggering 175 per cent increase compared to the same month last year and marks the highest number of October layoffs since 2003.

The scale of these cuts, driven by a combination of slowing consumer and corporate spending and the accelerating adoption of artificial intelligence for cost optimisation, sent shockwaves through equity markets already anxious about lofty valuations in the tech sector. The data provided tangible evidence of an economic slowdown that many investors had previously dismissed as transitory, forcing a reassessment of the resilience of the US economy in the face of persistent inflation and higher-for-longer interest rates.

This reassessment was immediately reflected in the performance of US equities on Thursday, November 6, 2025. The tech-heavy Nasdaq Composite bore the brunt of the selloff, plummeting 1.9 per cent, while the broader S&P 500 declined by 1.1 per cent and the Dow Jones Industrial Average fell by 0.8 per cent. The sharp move lower in the Nasdaq, in particular, was a direct consequence of investors taking profits from AI-related stocks that had powered the market’s rally for much of the year.

The behaviour of the US Treasury market further validated this flight from risk. As investors sought safety, yields on government debt fell sharply. The yield on the two-year Treasury note dropped by 7.2 basis points to settle at 3.557 per cent, while the benchmark 10-year yield declined by 7.6 basis points to close at 4.083 per cent. This rally in bonds signalled growing expectations that the Federal Reserve’s tightening cycle may be nearing its end, or that a more severe economic downturn could be on the horizon, prompting a potential pivot in monetary policy.

The US Dollar Index, a traditional safe-haven asset, paradoxically weakened, falling by 0.5 per cent to 99.71. This counterintuitive move can be interpreted as a sign that the market’s fear is not of a global crisis that would boost demand for the dollar, but rather a more domestic US-centric slowdown. In such a scenario, the expectation of future rate cuts by the Fed outweighs the currency’s safe-haven appeal. This narrative was reinforced by the action in the commodities market.

Gold, the ultimate monetary hedge, saw its price rise to US$4,001 per ounce, a gain of 1.5 per cent, as capital rotated into a store of value perceived to be outside the direct influence of central bank policy. Conversely, oil prices weakened as the prospect of a US economic slowdown dented demand expectations. Brent crude settled at US$63.38 per barrel, down 0.2 per cent, a move exacerbated by Saudi Arabia’s decision to lower the official selling prices of its crude oil to Asian customers, a clear signal of its own concerns over future demand.

In the digital asset space, the market’s reaction was swift and severe. The crypto market fell 1.65 per cent over the last 24 hours, extending a 7.2 per cent weekly loss. This selloff was not driven by a single factor but by a perfect storm of negative catalysts. The primary trigger was a decisive technical breakdown in Bitcoin’s price structure.

For weeks, the US$100,000 level had served as a critical psychological and structural support. When Bitcoin’s price dropped below this key threshold, it activated a cascade of automated sell orders from a fragile market that had been clinging to hope. This breakdown was confirmed by its close below its 365-day moving average at US$102,000, a long-term trend indicator whose breach is a serious bearish signal for long-term investors.

Compounding this technical failure was a dramatic evaporation of market liquidity. In an environment of fear, traders became unwilling to take on risk. Derivatives volume plunged by 39 per cent in 24 hours, with open interest collapsing to its lowest level since May 2025.

The spot-to-perpetual trading ratio of 0.24, a metric that shows the dominance of leveraged trading over simple spot transactions, indicated that traders were not just selling but were also actively avoiding any form of leveraged position. This lack of liquidity amplified the price moves, creating a negative feedback loop where a small sell order could create a disproportionately large price drop due to the absence of buyers.

The behaviour of the spot Bitcoin ETFs provided the most compelling evidence of a macro-driven selloff. This week, these funds saw a staggering US$3.6 billion in net redemptions, marking one of the worst outflow streaks since their inception. This was not a retail-driven panic but a wholesale retreat by institutional investors. These large players, who are more attuned to macroeconomic signals and portfolio risk management, used the ETFs as a convenient vehicle to exit their crypto exposure en masse.

Their actions decisively tethered the fate of the entire crypto market to that of the Nasdaq, with the two assets showing a near-perfect 0.95 correlation this week. This link demonstrates that for the current market cycle, crypto is being treated not as a separate, uncorrelated asset class, but as a high-beta, risk-on component of the broader technology and growth equity complex.

The path forward for the markets is now precariously balanced on a knife’s edge. The current oversold conditions in both the Nasdaq and Bitcoin, with the latter’s RSI at a low 31.5, suggest that a short-term bounce is a distinct possibility. A sustained recovery will require a fundamental shift in the underlying narrative. For equities, that would mean evidence that the labour market is stabilising or that the Fed is ready to signal a clear pivot towards rate cuts.

For Bitcoin, the critical threshold is a decisive daily close back above the US$100,000 level to invalidate the bearish technical structure, coupled with a halt to the ETF outflows and a return of institutional confidence. Until these conditions are met, the market will remain vulnerable to any further negative macroeconomic data, and the current risk-off environment is likely to persist.

Source: https://e27.co/tech-crash-2-0-ai-hype-meets-labour-reality-as-nasdaq-and-bitcoin-tumble-in-tandem-20251107/

Anndy Lian

www.anndy.com

j j j

October 8th, 2025

Global risk-off sentiment emerges as political instability meets cryptocurrency correction

Global financial markets experienced heightened volatility as political upheaval in Japan and France sparked concerns about fiscal stability, while cryptocurrency markets underwent a significant correction despite Bitcoin’s recent record highs. The convergence of unexpected political developments, yield curve steepening, and profit-taking activities created a complex backdrop that tested investor confidence across asset classes.

Political instability drives market uncertainty

The most significant catalyst for Tuesday’s risk-off sentiment emerged from unexpected political developments in two major economies. In Japan, Sanae Takaichi’s surprise victory in the Liberal Democratic Party leadership election sent shockwaves through currency markets. Takaichi, a hardline conservative positioned to become Japan’s first female prime minister, represents a stark departure from market expectations and has already begun reshaping the political landscape.

The implications of Takaichi’s victory extended beyond domestic politics. Her appointment of key allies to senior positions, including Suzuki Shunichi as secretary-general and Arimura Haruko as chairperson of the General Council, signaled a consolidation of conservative power within the LDP. These developments have raised concerns about the party’s ability to maintain its coalition with the centrist Komeito party, as the Buddhist-affiliated group has expressed “significant worries and concerns” about Takaichi’s positions.

The political uncertainty in Japan was compounded by an equally dramatic crisis unfolding in France. Prime Minister Sébastien Lecornu resigned after merely 26 days in office, becoming the third government to collapse in recent months. Lecornu’s departure highlighted the persistent political gridlock that has plagued France since President Emmanuel Macron’s decision to call snap elections in 2024 resulted in a hung parliament.

France’s political instability has deep structural roots. The country’s deficit reached 5.8 per cent of GDP in 2024, while national debt stands at 114 per cent of GDP, representing the third-highest public debt burden in Europe. This fiscal strain has made it increasingly difficult for any government to secure parliamentary support for necessary budget measures, creating a cycle of political instability that shows no signs of abating.

Currency markets react to political developments

The Japanese yen bore the brunt of the political uncertainty, extending its decline to 151.90 against the dollar, marking its weakest level since February. This continued weakness reflects market concerns about Takaichi’s pro-stimulus stance and her potential impact on Bank of Japan monetary policy. Currency traders have reduced their expectations for aggressive interest rate hikes, given Takaichi’s historical support for accommodative monetary policy.

The yen’s decline represents part of a broader trend that has seen the currency lose more than one-third of its value since early 2021. The fundamental driver remains the substantial interest rate differential between Japan and other major economies, with US short-term rates at 5.25-5.5 per cent compared to Japan’s 0-0.1 per cent range. This gap has created attractive carry trade opportunities, where investors borrow yen at low rates to invest in higher-yielding currencies.

Meanwhile, the US Dollar Index strengthened for a second consecutive day, reaching 98.58. This rise reflected both safe-haven demand amid global political uncertainty and the relative stability of US economic fundamentals. The dollar’s strength was broad-based, with gains registered against all G-10 currencies as investors sought refuge in what they perceived as the world’s most liquid and stable currency market.

Bond markets signal fiscal concerns

The global yield curve steepening that accompanied Tuesday’s political developments reflected renewed concerns about fiscal sustainability. US Treasury yields provided a mixed picture, with the 2-year yield declining 2.5 basis points to 3.564 per cent while the 10-year yield fell 2.9 basis points to 4.123 per cent. This flattening of the yield curve suggested that while investors remained concerned about near-term economic growth, longer-term inflation expectations remained elevated.

The bond market movements were particularly significant given the backdrop of the ongoing US government shutdown. The political stalemate in Washington, which began on October 1, has delayed key economic data releases and heightened policy uncertainty. Despite this domestic political challenge, US Treasuries continued to benefit from safe-haven flows as investors sought quality assets amid global uncertainty.

The government shutdown has created operational challenges across multiple federal agencies. The Labor Department indicated that only 3,100 of its roughly 12,900 employees would remain on the job, while the Bureau of Labor Statistics would operate with just one employee. These staffing reductions have delayed critical economic data releases, including the Consumer Price Index, which could impact Social Security cost-of-living adjustments.

Equity markets show mixed performance

US equity markets declined overnight, with the S&P 500 falling 0.4 per cent, the Nasdaq dropping 0.7 per cent, and the Dow Jones decreasing 0.2 per cent. The technology sector led the decline as investors engaged in profit-taking following a strong recent run. This correction came despite generally positive underlying economic fundamentals and continued optimism about artificial intelligence applications.

The contrast was stark in Asian markets, where Taiwan’s TAIEX surged 1.68 per cent to a fresh record high as the island resumed trading after a holiday. The rally was driven by continued optimism about artificial intelligence demand, with Taiwan’s semiconductor sector benefiting from robust global appetite for AI-related hardware and applications. Taiwan’s market performance highlighted the geographic divergence in investor sentiment, with Asian markets showing greater resilience to global political uncertainty.

Taiwan’s exceptional performance reflected its central position in the global technology supply chain. The TAIEX has gained 28 per cent in 2024, making it the best-performing major Asian market. This outperformance has been driven primarily by electronics shares, which account for more than 70 per cent of TWSE market capitalisation and have surged 43.2 per cent on the continued AI boom and US tech stock rallies.

The strength in Taiwanese equities also extended to individual companies. TSMC, the world’s largest contract chip manufacturer, has seen its shares rise significantly as the company continues to benefit from the growing demand for artificial intelligence. Other technology companies, including Foxconn and Quanta Computer, have also seen their shares rise, driven by the surge in demand for AI servers.

Commodity markets reflect global uncertainty

Commodity markets provided mixed signals as investors grappled with competing forces. Brent crude oil settled marginally lower at US$65.45 per barrel as traders assessed OPEC+’s latest supply decisions. The oil cartel’s decision to increase collective production by 137,000 barrels per day starting in November was smaller than market expectations, providing some support to prices.

The modest nature of OPEC+’s output increase reflected the group’s cautious approach amid concerns about global demand and potential oversupply. Analysts noted that the decision fell short of market expectations for a more aggressive increase, suggesting that OPEC+ members remain concerned about the outlook for oil consumption. The group’s restraint was particularly notable, given predictions for a global supply surplus in both the fourth quarter and the following year.

Gold, traditionally viewed as a safe-haven asset, gained 0.6 per cent to reach a new record high, driven by the US government shutdown and the political crisis in France. The precious metal’s rally reflected its enduring appeal during periods of political and economic uncertainty. Gold prices have surged over 31 per cent this year, breaking several previous records as investors seek protection against inflation and currency debasement.

The gold rally was particularly pronounced during Asian trading hours, suggesting strong demand from emerging market investors and central banks. This geographic pattern has become increasingly common in 2024, with much of gold’s price appreciation occurring outside traditional Western trading hours. The trend reflects the growing influence of Asian investors and central bank purchasing in driving gold demand.

Cryptocurrency market correction

Despite Bitcoin reaching a new all-time high above US$126,000 earlier in the week, the cryptocurrency market fell 2.69 per cent in the past 24 hours. This correction was driven by a combination of profit-taking after recent gains, ETF outflow concerns, and high leverage unwinding. The pullback highlighted the volatile nature of digital asset markets and their sensitivity to both technical and fundamental factors.

The most significant concern emerged from ETF flow reversals. Grayscale’s Bitcoin ETF experienced US$28.6 million in outflows, marking its first negative day in three weeks. This development was particularly noteworthy given that Bitcoin ETFs had been experiencing strong inflows, with total net inflows reaching US$3.2 billion in the first week of October.

The cryptocurrency market’s leverage structure amplified the correction. Perpetuals volume spiked 22 per cent to US$540 billion, with over US$20 million in liquidations adding downward pressure to prices. This leverage flush turned what might have been a routine pullback into a more significant correction, as over-leveraged positions were forced to close.

Market sentiment indicators reflected the changing mood among cryptocurrency investors. The Fear & Greed Index dropped from 62 (Greed) to 55 (Neutral) as Bitcoin failed to hold its US$126,000 all-time high. This shift from greed to neutral territory suggested that some of the speculative excess had been removed from the market, potentially setting the stage for more sustainable price appreciation.

Central bank policies and market outlook

The divergent monetary policy stances of major central banks continued to influence market dynamics. The Federal Reserve’s gradual approach to interest rate normalisation contrasted sharply with the Bank of Japan’s ultra-accommodative stance, creating opportunities for carry trades that have contributed to yen weakness.

Market participants are closely watching for signs of policy coordination among major central banks. The current environment of divergent monetary policies has created significant cross-border capital flows and currency volatility that could become destabilising if left unchecked. The political developments in Japan and France have added another layer of complexity to this already challenging policy environment.

Looking ahead, investors will be monitoring several key developments. The resolution of political crises in Japan and France will be crucial for market stability. In Japan, Takaichi’s ability to maintain the LDP’s coalition with Komeito will determine the government’s effectiveness and longevity. In France, President Macron’s next steps will determine whether the country can break out of its current political gridlock.

The global economic outlook remains uncertain, with multiple factors contributing to market volatility. Political instability in major economies, divergent monetary policies, and ongoing geopolitical tensions have created a complex environment for investors. While some markets, particularly in Asia, have shown resilience, the broader trend suggests that volatility will remain elevated as these various factors continue to evolve.

The current market environment underscores the interconnected nature of global financial systems. Political developments in individual countries can quickly spread, affecting currency, bond, and equity markets worldwide. This interconnectedness means that investors must remain vigilant about political developments across multiple jurisdictions, as local events can have global implications for portfolio performance and risk management strategies.

Source: https://e27.co/global-risk-off-sentiment-emerges-as-political-instability-meets-cryptocurrency-correction-20251008/