Trading

The Federal Reserve ended quantitative tightening on December 1 and immediately deployed a $13.5 billion overnight repo operation. Analysts view the liquidity shift as a potential catalyst for risk assets, though a possible Bank of Japan rate hike in December could temporarily moderate gains. The move marks the first significant liquidity injection since the withdrawal phase began in June 2022.

Bloomberg Senior ETF Analyst Eric Balchunas challenged a Citi research note claiming U.S. spot Bitcoin ETF outflows directly correlate with price declines. Citi estimated each $1 billion in withdrawals corresponds to a 3.4% price drop. Balchunas argued the calculation ignores $22.5 billion in year-to-date inflows, which would imply a 77% price increase by the same logic.

Bitcoin traded above $86,000 after recovering from a brief drop below $84,000 on Tuesday. The cryptocurrency faces potential upward movement toward $93,000 resistance, while the critical $83,000 support level remains intact. Options data shows 15% of traders expect BTC to fall below $80,000 by year-end, while 21% anticipate prices exceeding $100,000.

Grayscale Research forecasts bitcoin will reach new all-time highs in 2026, rejecting the traditional four-year cycle theory that anticipates extended bear markets. The firm points to institutional investment structures and favorable macroeconomic conditions as key differentiators from prior cycles. Bitcoin traded at $86,909 as of 2:20 a.m. ET Tuesday after declining 32% from its peak.

Several market analysts view Bitcoin's recent decline as a temporary pullback rather than a trend reversal, with multiple forecasts pointing to a potential rally in the coming weeks. Fundstrat's Tom Lee expects Bitcoin could surpass its prior peak near $125,000 as early as January, while others cite macroeconomic policy shifts as key drivers. Rising speculation over Federal Reserve leadership change and historical policy patterns add to bullish sentiment for early 2025.

Bitcoin traded around $86,000 during Asian hours following a significant cryptocurrency selloff and global bond market pressure. The largest digital asset by market capitalization remains approximately 30% below its October peak. Market participants exercised caution amid shifting monetary policy expectations in Japan and ongoing stress in credit markets.

Strategy CEO Phong Le disclosed that the company could sell Bitcoin if its stock price falls below the net asset value of its cryptocurrency holdings and it cannot secure capital for preferred dividends. Bitcoin dropped below $85,000 amid the speculation. The firm revised its year-end BTC price forecast from $150,000 to a range of $85,000–$110,000.

Ethereum futures open interest increased by $653 million following a sharp decline that pushed ETH to approximately $2,800. The asset dropped 8% over 24 hours, with trading volume reaching $23.8 billion during the period. Technical indicators suggest the asset may be entering oversold territory as it tests critical support levels.

Ethereum's open interest rose more than 4% after a sharp price decline pushed ETH to the low $2,800 range. The cryptocurrency saw liquidations totaling $158 million, including $140 million from long positions, yet derivatives traders opened fresh positions worth approximately $654 million.

The cryptocurrency market lost $160 billion in value as Bitcoin dropped 4.3% to $86,000, triggering $637 million in liquidations with long positions accounting for 90% of the total. Data show MicroStrategy's market-to-net-asset value fell to 0.97× on November 22, with investors effectively paying less than $1 for each $1 of Bitcoin held by the company.