Recent market turbulence has prompted many investors to question whether the crypto bull run has come to an end. While cryptocurrency prices have experienced notable declines, experts urge caution before drawing conclusions, highlighting a mix of global liquidity efforts and ongoing market cycles.
China Injects $50 Billion to Support Liquidity
According to Solana News, China has injected approximately 351.8 billion CNY (around $50 billion USD) into the financial system to support liquidity amid global market weakness. This move is part of broader efforts across multiple regions to gradually increase money supply and reassure investors after recent market corrections.
Despite these measures, immediate effects on risky assets, including cryptocurrencies, remain limited. Investor sentiment continues to be defensive, and short-term price movements may not fully reflect the inflow of fresh capital.
CME Group Signals 50% Chance of U.S. Rate Cut
Data from CME Group shows a 50% probability that the Federal Reserve will lower interest rates to 3.50%–3.75% on December 10. In the United States, large-scale liquidity injections are typically tied to rate cuts or other measures aimed at easing credit conditions.
If the Fed does cut rates, risk assets—especially crypto—may benefit. However, a sustained tight policy stance could continue to suppress recovery momentum.
Crypto Market Faces Short-Term Pressure Despite Increasing Capital
Even as liquidity improves, the crypto market has declined sharply over 24 hours, with Bitcoin falling below $100,000 and overall market losses reaching 6.6%. Data from Binance Futures indicates a significant buy wall between $96,000–$97,000, encompassing over 2,800 BTC, though these support levels have yet to hold.
The discrepancy between incoming capital and market pricing highlights the typical lag during transitional phases. Seasonal trends and profit-taking following a strong year add further uncertainty, creating a period of choppy price action before clearer recovery patterns emerge.
Bitcoin Remains Resilient Compared to Altcoins
Analyst Avocado suggests it is too early to declare the bull market over. Bitcoin shows relative resilience, supported by deep liquidity and institutional capital, while altcoins—more dependent on speculative flows—may struggle in the near term. Historical on-chain data also suggests that the market is currently in a mid-cycle phase, where large-cap assets like Bitcoin tend to stabilize first before capital rotates into altcoins.
Buy Walls Are Forming but Not Yet Turning the Tide
Large buy walls around $96,000–$97,000 reflect active buying interest, yet the inability of these levels to maintain price indicates short-term supply pressure remains dominant. Stronger and longer-lasting support may increase the probability of local bottoms, but without it, price volatility could persist.
Cautious Outlook Amid Market Transition
After a strong year of gains, the market is entering a seasonal transition, making short-term recovery predictions more complex. Deep corrections can trigger buying interest, but without clear macroeconomic easing, these moves may not translate into sustainable trend reversals.
Key Indicators to Watch for Recovery
Investors should monitor several factors to gauge the likelihood of a market rebound:
-
Fed rate cut probability according to CME Group.
-
The depth and durability of buy walls at key support zones.
-
Basis discrepancies between spot and derivatives markets.
An increase in rate cut probability, reinforced buy walls, and healthy basis between spot and derivatives could signal a higher chance of recovery. Conversely, simultaneous weakening across these indicators may indicate continued risk of short-term corrections before new capital is fully priced in.
FAQs
-
Why did China inject 351.8 billion CNY?
To support liquidity and stabilize financial conditions amid global market weakness. -
What does CME Group indicate about U.S. rates?
CME Group assigns a 50% chance of a rate cut to 3.50%–3.75% on December 10, suggesting U.S. liquidity support may depend on easing. -
Why is Bitcoin more resilient than altcoins?
Bitcoin has deeper liquidity and institutional backing, making it less vulnerable to short-term speculative swings, while altcoins depend more heavily on risk capital. -
Are buy walls enough to reverse the trend?
Not yet. While showing active buying, current buy walls have not held prices. More time is needed for new capital to reflect in the market. -
When could the market see a clear recovery?
A combination of lower interest rates, improved liquidity, and positive signals from on-chain, derivatives, and spot markets is needed for sustained recovery. Until then, price movements may remain choppy due to seasonal effects and profit-taking.
In conclusion, while crypto markets face short-term headwinds, experts stress that it is premature to panic. A cautious but attentive approach, monitoring liquidity, macroeconomic conditions, and on-chain indicators, remains key for navigating this transitional phase.
Ready to start your cryptocurrency journey?
If you’re interested in exploring the world of crypto trading, here are some trusted platforms where you can create an account:
- Binance – The world’s largest cryptocurrency exchange by volume.
- Bybit – A top choice for derivatives trading with an intuitive interface.
- OKX – A comprehensive platform featuring spot, futures, DeFi, and a powerful Web3 wallet.
- KuCoin – Known for its vast selection of altcoins and user-friendly mobile app.
These platforms offer innovative features and a secure environment for trading and learning about cryptocurrencies. Join today and start exploring the opportunities in this exciting space!
Want to stay updated with the latest insights and discussions on cryptocurrency?
Join our crypto community for news, discussions, and market updates: CryptoBCC on Youtube | Telegram | Facebook | Discord | X(Twitter)
For collaborations and inquiries: CryptoBCC.com@gmail.com
Disclaimer: This is not investment advice. Cryptocurrency investments carry high risk. Always conduct your own research.
