#DecemberMarketOutlook

# December Market Outlook | BTC Breaks Below 90,000, Fed Policy May Be Key to Year-End Reversal

As December just started, the cryptocurrency market gave investors a "wake-up call" —
BTC plunged over 4000 USD in two hours, hitting a low of 86161; ETH crashed over 200 USD, dropping below 2900, with over 480 million USD in long positions liquidated across the network in 24 hours, nearly 200,000 people lost everything overnight.

❗Why did the sudden crash happen? 4 major negative factors hit at once.

1️⃣ Regulatory alarm again: The central bank, together with multiple departments, reiterates that "virtual currency belongs to illegal financial activities," causing market panic to escalate.
2️⃣ Macroeconomic pressures intensify: Japan may raise interest rates in December, and the Federal Reserve has yet to lower rates, causing funds to hesitate in entering risk assets.
3️⃣ Institutional funds are lagging behind: Although the ETF has a small net inflow, it pales in comparison to BlackRock's $2.34 billion outflow in November.
4️⃣ Whales quietly cash out: The "old whale" sold 7,000 ETH in 2016, and large holders continue to sell, undermining confidence.

Is there an opportunity hidden in bad news? Two major good news can be expected in December.

✨ The Federal Reserve stops tapering (QT): $2 trillion has been withdrawn over three years, and now stopping the "withdrawal" = the market is expected to "inject liquidity" again, and liquidity is likely to improve.
✨ The probability of a rate cut is 87.4%: If the rate decision on December 10 results in a 25 basis point cut, it will be the biggest reversal catalyst for the cryptocurrency market.

🔍 How to proceed at the end of the year? 7 industry experts share their views.

- CryptoQuant: The total amount of stablecoins has exceeded 160 billion USD = ample ammunition, a rebound is brewing.
- MisterCrypto: Retail panic selling = a signal for institutions to secretly buy the dip.
- Arthur Hayes: BTC expected to reach 250,000 by the end of the year! 80,600 is the bottom.
- Dr. Dragosch: The macro situation is similar to the early stage of the pandemic, and Bitcoin prices are severely lagging.
- Santiment: ETH is expected to rebound to 3200 in the short term.
- Ali: BTC needs to drop at least 37% for the sentiment to hit the bottom, and currently it's only at 20%.
- Matrixport: There is a contradiction between macro and seasonal trends, key positions need to be observed with caution.

📌Summary: Panic and opportunity coexist

The market is highly volatile, but there are clear variables in December: Federal Reserve policy, stablecoin liquidity, and whale movements.
📉 For those with heavy positions, it is not advisable to blindly cut losses;
💰 If you want to buy the dip, don't rush to "pounce"; wait for clearer signals to be more prudent.