Bitcoin saw a sharp 14% pullback over the past week, dropping from recent highs near $94k to lows of $80k before stabilising around $87k, with the move driven by a rapid, sentiment-led de-risking across US markets. The initial catalyst was the abrupt repricing of December rate-cut expectations, with the probability of a cut sliding from roughly 70% to 42% in a week despite no supportive macro data, leaving crypto, the most liquidity- and sentiment-sensitive asset class, particularly exposed. This decline was amplified by targeted pockets of large selling and widespread clearing out of positioning. Some pressure also came from crypto whales trimming exposure, a seasonal pattern typically seen in Q4–Q1 cycles but pulled forward this year by expectations of a softer 2025; this brought forward de-risking and intensified the move.
Despite the short-term shift in rate expectations, the broader macro environment remains supportive, with global liquidity channels still opening: Japan announced a $135bn stimulus package, China continues easing, the U.S. QT program ends next month, and additional fiscal measures, such as the proposed $2k stimulus, remain in play. The key question is the timing: how quickly this liquidity reaches markets, and how much of it flows into speculative risk assets like crypto.
On-chain activity last week painted a more constructive picture. After months of net selling through 2025, crypto whales and long-term holders showed their first signs of accumulation, with the number of entities holding at least 1,000 BTC rising to 1,436, and whales with more than 10,000 BTC no longer acting as heavy sellers for the first time since August. If seller exhaustion has been reached at current levels, this could set the stage for another attempt at the crucial $100k level. Whale accumulation alongside an oversold RSI points to the potential for a pause or rebound, though, as with the 4-year cycle, both metrics are so widely tracked that their signals can become self-fulfilling as traders act on them collectively.
In equities, Nvidia’s strong Q3 earnings helped ease some anxiety by beating expectations and reaffirming robust chip demand, though NVDA shares remain ~4% lower since Michael Burry’s “big short” tweet. Meanwhile, Thursday’s delayed US jobs report showed surprising labour-market strength, positive for the economy but negative for rate-cut hopes, triggering the S&P 500’s biggest one-day decline since April. By Friday, hints from the Fed that a cut could still come within weeks lifted sentiment slightly, though not enough to pull the index into positive territory for the week.
Looking ahead, this week’s narrative centres on UK data and global macro signals, all feeding directly into crypto sentiment. Wednesday’s UK inflation and consumer-spending prints will shape expectations for the Autumn Budget and broader risk appetite: stronger data may push yields higher and pressure risk assets, while softer numbers could support a more accommodative backdrop in which crypto typically performs well.
Globally, a busy macro calendar and ongoing geopolitical tensions will continue to dictate risk appetite. High-impact releases, including US PPI and core PPI on Tuesday, employment figures, and commentary from the ECB, will influence expectations for global liquidity. With crypto acutely sensitive to shifts in rate outlook, hotter-than-expected inflation or labour data could reignite concerns of tighter policy, while softer readings would bolster hopes of easing and support a return to risk-on positioning.
Geopolitics remains another major driver, with developments in the Russia-Ukraine negotiations, rising US-China friction, and continued Middle East uncertainty shaping market sentiment. Escalations would likely trigger a flight to safety, benefiting the dollar and gold at the expense of Bitcoin and altcoins, while any signs of de-escalation or diplomatic progress could help stabilise risk assets.