With the macro liquidity crisis temporarily resolved and the selling trend declining, BTC is poised to retest $94,000.

Author: 0xBrooker

This week can be described as a "mine-clearing week" for global financial markets, with multiple major data releases, interest rate events, and settlement dates taking place one after another, gradually alleviating short-term risks in the US stock market.

BTC is still in a deleveraging/repricing phase after a 30%+ retracement from its October 2025 high of $126,000. The price is repeatedly testing the $85,000-$90,000 range and has not yet formed a trend reversal signal.

In terms of market participant dynamics, long-term holders continued to reduce their holdings, retail investors continued to withdraw, while DATs and whale shark investors continued to increase their holdings. The game remains unresolved, but the selling trend is slowing, macro liquidity has eased, and trading enthusiasm has recovered somewhat. BTC is expected to retest $94,000 in the coming weeks.

Policy, macro-financial and economic data

A series of major data releases, interest rate events, and settlement dates in global financial markets reinforced the consensus that the US economy would experience a mild recession in employment and a gradual decline in inflation, leading to a soft landing. US stocks initially declined before rebounding throughout the week, indicating that the market had priced in the events and that short-term risks had eased. BTC followed the US stock market's lead, ultimately closing with a slight gain of 0.53%.

On December 16, the U.S. Department of Labor released non-farm payroll data for October and November. October saw a decrease of 105,000 jobs, while November saw a rebound of 64,000 jobs, though still weak. The unemployment rate rose to 4.6% in November, the highest level since 2022.

US non-farm payrolls and unemployment rate

On December 18, the U.S. Bureau of Labor Statistics released November's CPI data, showing a year-on-year increase of 2.7%, significantly lower than the expected 3.1%, while core CPI rose 2.6% year-on-year, also significantly lower than the expected 3%. Due to the government shutdown and insufficient data collection, several institutions have warned that the data may contain statistical distortions, and its repeatability needs to be verified by the December data. In his speech on Friday, Federal Reserve Vice Chairman John Williams also emphasized this point. This means that a rate cut in January remains a low-probability event.

The unemployment rate hit a multi-year high, while the CPI data "dropped sharply." Although the confidence level is low due to data collection issues, the market still maintains its judgment that the Federal Reserve will most likely implement two 50-basis-point rate cuts in 2026.

On December 19, the Bank of Japan unanimously approved a rate hike, raising the policy rate by 25 basis points from 0.50% to 0.75%, reaching a 30-year high. At the press conference, Bank of Japan Governor Kazuo Ueda emphasized that future adjustments would be based on data; he also pointed out that current interest rates remain below the projected neutral range and that real interest rates remain negative.

Because market pricing had been completed and the Bank of Japan's statement was "dovish," the USD/JPY pair rebounded strongly after hitting a low on Tuesday, once again approaching its year-to-date high. This significantly reduced market expectations of a carry trade impact from yen rate hikes and dollar rate cuts. Markets returned to their original logical trajectory.

Affected by the yen's interest rate hike, the US market's "triple witching day" (stock index options, stock index futures, and individual stock options) settlement day, with a notional value of $7.1 trillion, saw a stable performance on Friday, with the three major US stock indexes continuing to climb and closing at their highest points.

While concerns about AI spending and profitability persist, the release of US interest rate cuts, Japanese yen rate hikes, and US inflation and employment data has temporarily pulled the market through turbulent territory. Although BTC is still hovering near its rebound lows, it has temporarily escaped the $80,000 low caused by macroeconomic financial risks and insufficient liquidity, and a rebound is expected.

Traders are beginning to anticipate a "Christmas rally" and await market guidance after January data recovers.

Crypto Market

As a leading indicator of global macro liquidity, BTC has been declining since October. This decline is driven by two factors: firstly, the selling and deleveraging of high-beta assets amid liquidity constraints, and secondly, the reduction of long-term holdings driven by the "cyclical law".

BTC Daily Chart

According to on-chain data, the "sell-off" by the "long-term holders" continues, with nearly 90,000 BTC activated into short-term holdings this week, of which 12,686 were directly converted into exchanges for sale. The total sell-off by both long-term and short-term holders this week reached 174,100 BTC, lower than last week, but still at a high level.

Weekly statistics on exchange sell-off volume.

Furthermore, the exchange has reversed the outflow trend, showing a slight accumulation this week, all of which are pessimistic signals.

However, the 30-day rolling volume of the exchange's sell-off is decreasing, which means that the most frenzied selling phase in the short term is passing.

Selling is increasing, but funds are flowing out.

Crypto Market Fund Inflows and Outflows Statistics (Weekly)

Since bottoming out on November 21, funds gradually showed a positive inflow, but this week they began to flow out, with simultaneous outflows through both stablecoin and ETF channels. This is the fundamental reason for the second dip in BTC price and the weak rebound, meaning that selling pressure has not significantly decreased, but buying power is being lost. Whether buying power can return next week after macroeconomic risks are resolved will be crucial.

From an on-chain supply perspective, 67% of BTC is currently profitable, while 33% of the supply is in a loss-making state, which is the lowest level since the beginning of this bull market.

Including on-chain and ETF channels, retail investors are still withdrawing from the market. Buying power comes from DATs and whale sharks, a group with a high success rate in contrarian trading, and they continue their actions. In the past two years of bull market, they have shown an extremely high success rate, becoming a major force shaping the market.

This week, the CPI, inflation, and yen interest rate hike have been initially cleared of potential risks. Whether ETF funds return or continue to flow out next week will likely determine the short-term trend of BTC. As for the medium-term trend—whether it continues to rebound and retest $94,000 or even recover the short-term investor cost line of $103,000, or retests the bottom and completely falls into a bear market—remains to be seen through further debate among various trading groups.

Cyclical Indicators

According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0, indicating that it has entered a "downtrend" (bear market).