Crypto and global risk assets found relief this week as expectations for a December Federal Reserve rate cut jumped sharply from ~30% to ~85%. The shift helped lift Bitcoin back above US$90,000, while the S&P 500 advanced 2.8%.Altcoins also recovered, but breadth remains weak: 79 of the top 100 tokens are still more than 50% below their all-time highs, underscoring how narrow this cycle’s leadership has become.Cycle-critical liquidity channels — stablecoin supply, ETF flows, and Digital Asset Treasury (DAT) issuance — have slowed in recent weeks. While newly launched altcoin ETFs continue to see steady, positive net inflows exceeding US$1.3B, broader capital rotation remains limited.Near-term direction now depends heavily on the December FOMC meeting and the upcoming nomination of the next Federal Reserve Chair, both of which will shape market expectations into year-end.Market OverviewMarkets stabilized and moved higher this week as traders gained clarity on the macro backdrop.Rate-cut probabilities for the December meeting rose rapidly from last week’s lows, leading to:Lower U.S. Treasury yieldsA softer U.S. dollar (DXY)A rebound in major risk assetsBitcoin added 4.9%, closing the week above US$90,000, while the S&P 500 gained 2.8%.Despite the rebound, activity remained subdued due to the U.S. Thanksgiving-shortened trading week, which muted both volatility and volume.As the final month of 2025 approaches, markets are focused squarely on Fed policy — both the rate decision on December 9 and the Fed chair nomination, expected before year-end. These events follow the U.S. government's record 43-day shutdown, which has temporarily distorted macro data visibility. Early releases now point toward a softening labor market, further reinforcing rate-cut expectations.1. Digital AssetsCrypto Recovers, but the Cycle Remains NarrowDigital assets climbed this week as selling pressure eased. Most major tokens gained at least 5%, though BTC and multiple large caps (excluding BNB and XRP) remain negative for the year.A broader look at the market reveals the underlying fragility:79 of the top 100 tokens are still >50% below their ATHsCorrections this cycle have widened the dispersion between majors and altcoinsMajors continue to attract liquidity; long-tail altcoins remain structurally weakSegments showing relative resilience include:Exchange/DEX tokens — supported by strong ecosystem flowsDeFi — buoyed by token buybacks and clearer fundamentalsPrivacy tokens — benefiting from growing on-chain use-case narrativesThis resilience signals where capital chooses to remain allocated during volatility.Why the Rally Remains ConcentratedEarlier in the year, when liquidity inflows were strong (stablecoins, ETFs, DATs), nearly all capital flowed into BTC and top large caps. Rotation into smaller tokens never materialized before liquidity slowed, leaving large caps disproportionately supported.A broader market recovery will require:Re-acceleration of liquidity inflows, andRotation beyond majors into mid-caps and long-tail assetsThe key liquidity drivers — stablecoins, ETFs, DAT issuance — have softened in recent months.Altcoin ETFs: A Bright SpotOne theme continues to gain traction: newly launched altcoin spot ETFs, including exposure to SOL, XRP, LTC, and DOGE.Despite recent market volatility:Altcoin ETFs have posted steady net inflowsCumulative inflows now exceed US$1.3BAdditional ETFs are awaiting approval and may broaden TradFi accessAs seen with ETH earlier in the cycle, demand often builds gradually after launch, suggesting these products may become meaningful catalysts into 2026.2. Global MarketsEquitiesEquities rose sharply as macro sentiment improved:S&P 500: +2.8%NYFANG+ Index: +3%FXThe DXY fell 0.54%, reflecting weaker labor data and rising odds of a December rate cut.CommoditiesGold continued its upward trend with a 2.88% weekly gain.BondsU.S. Treasuries strengthened on:Softer ADP payrollsA drop in consumer confidenceSigns of weakening labor conditionsVolatilityMarket volatility declined as Thanksgiving reduced trading activity and macro uncertainty temporarily eased.3. Intermarket ViewDigital assets continue to move in line with risk assets, but notable shifts emerged:BTC’s 2-month correlation with equities slipped slightlyCorrelation with gold increased to 0.32, possibly indicating a short-term rotation toward defensive hedgesThis shift typically occurs when markets transition out of acute risk-off conditions. Macro Outlook: Rate-Cut Expectations Reprice SharplyRate-cut odds surged this week as markets interpreted recent inflation and labor data as confirmation of slowing economic momentum.Key developments:Rate-cut probability for December rose from 30% to 84.7%PPI data showed further moderationLabor market indicators weakened significantlyConsumer confidence fell to its lowest level since AprilRetail sales rose only 0.2% in September — the weakest figure in four months.Markets now overwhelmingly expect a 25 bps cut at the December FOMC meeting.Upcoming Fed Chair NominationAttention is shifting toward the incoming Fed Chair.Kevin Hassett is currently the prediction-market favoriteMarkets expect a dovish lean aligned with President Trump’s preference for lower ratesHowever, the nomination remains uncertain and could move markets upon announcementHistorically, markets price in higher volatility leading into a chair appointment, depending on the perceived policy stance of the nominee.The Week Ahead: Key Events to Watch (Nov 29 – Dec 5, 2025)Major macro events this week include:U.S. ISM Manufacturing PMIU.S. ISM Services PMIEU Flash InflationJapan Consumer ConfidenceU.S. Core PCE, personal income, and spending — the most important releaseThese data points will shape rate expectations heading into the December FOMC decision and provide critical signals about the trajectory of U.S. economic momentum.
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