A Bitcoin bounceback? Tether troubles? Fed fluctuations? These and more occupy this edition of Web3 Thoughts of the Week.
Fed response key to Bitcoin bounceback
“The scale of this pullback is the market’s response to uncertainty, not a collapse in underlying demand. Many investors have been reducing exposure because they lack clarity on the Federal Reserve’s next move, among other reasons. Once that clarity arrives, positioning will likely shift quickly.
“More than $19 billion in long positions have already been liquidated. The market today is structurally cleaner than it was at the peak. This matters because Bitcoin’s ability to recover depends on what remains after forced selling clears.
“When liquidity contracts, even high-quality risk assets come under pressure. When liquidity expands, Bitcoin is one of the first beneficiaries. A 25-basis-point cut in December would shift financial conditions pretty much immediately.
“Lower rates weaken the dollar and reduce real yields. The combination pushes global capital toward assets with long-duration payoff profiles. Bitcoin sits firmly in that category. Investors respond quickly when the dollar softens because they reassess the opportunity cost of holding cash.
“Forward guidance will determine how markets price the entire curve. Should policymakers indicate that further adjustments remain possible in 2026, then the impact will extend far beyond the December meeting. Investors would reposition across risk assets, and Bitcoin could be expected to capture a meaningful share of that rotation.
“Equity markets have retreated, data releases in the US were disrupted earlier in the autumn, and geopolitical tensions remain elevated. These factors have intensified risk aversion. But none of them diminish Bitcoin’s long-term investment case.
“Institutional desks are watching the $80,000–$90,000 area closely. They’re analyzing it as a valuation zone with long-term appeal rather than a point of distress. This tells you where professional conviction stands.
“Supply is fixed, adoption remains on an upward trend, and the infrastructure supporting large-scale participation is improving.
“In addition, more sovereign wealth funds and corporate treasuries are assessing digital assets as part of strategic diversification. These developments create a demand base that did not exist in earlier cycles.
“When structural demand meets improving liquidity, the effect is amplified. Bitcoin has already shown this repeatedly across multiple cycles. The drawdown does not erase that dynamic.”
Expect investors to respond quickly if the Federal Reserve delivers a cut.
“Volatility will spike around the announcement, but underlying flows are likely to shift in Bitcoin’s favor. Investors want to deploy capital; they simply want assurance that monetary conditions are moving in the right direction.
“This Fed meeting is going to be a decisive moment for digital-asset markets. Bitcoin has absorbed a severe correction, but the essential foundations remain strong.
“A rate cut would strengthen liquidity, lift market confidence, and set the stage for the next phase of Bitcoin’s long-term upward trajectory.”
– Nigel Green, CEO, deVere Group
“As we head into the Thanksgiving holiday, markets are on a knife’s edge as December rate cut expectations yo-yo dramatically, in a way we rarely see. In just a few days, we’ve gone from just around 30% of market participants expecting a cut on Dec. 10, to over 80% betting on this outcome today.
“This, naturally, moves markets and explains Bitcoin’s recent recovery from a low of around $81,000 to its current level above $87,000. We could see further upside in the short-term if the market remains positive, especially considering the long/short ratio is currently overbalanced in favor of the shorts, which typically signals a reversal in favor of the longs.
“However, any optimism we’re seeing in risk assets is tenuous at best. Rate cut expectations have shifted based on remarks from senior Fed officials, but we haven’t seen any economic data to support this. And what’s clear is that the FOMC finds itself at one of the most divided times in its history. As such, no outcome can be certain until the big day itself.
“What is more certain, though, is that the Fed holds the key to the market’s end-of-year finale – and its next rate decision will determine whether we get a Santa rally or a Santa dump. As we get closer to Dec. 10, I expect market jitters to continue, and the Fed’s press conference will certainly have traders on the edge of their seats.
– Nic Puckrin, crypto analyst and co-founder of The Coin Bureau
“The global ‘risk-off’ macro environment and swell of leveraged selling has ultimately served as a necessary structural cleanse for Bitcoin. This deleveraging event removed many of the short-term, speculative players and made way for long-term investors, including institutional investors and hodlers, who have been accumulating Bitcoin strategically during the market dip.
“The resulting rebound of Bitcoin from multi-market lows, despite a perceived climate of ‘extreme fear’, signals the deep conviction in the asset’s underlying value and its continued resilience as the industry continues to mature.”
– Przemysław Kral, CEO of zondacrypto
Tether downgrade
“Despite the downgrade, USDT remains fully collateralized with redemptions, its peg mechanism, and its liquidity profile functioning normally. The assessment cites Tether’s increased allocation to BTC and gold as ‘higher-risk’ assets, along with limited visibility into the credit quality of certain counterparties. We’re not taking a view on those specific claims, but strictly from an on-chain perspective, USDT continues to behave like the most liquid stablecoin.
“On-chain data shows the peg holding, 24-hour volumes above $85B, and no meaningful outflows from exchanges or indications of heavy redemption pressure. In short, market behavior suggests participants are largely dismissing the downgrade and continue to treat USDT as reliably redeemable at 1:1, which is consistent with its historical performance through past periods of stress.”
– Jake Kennis, research analyst at Nansen
High December rate cut probability boosts markets
“US stock indices pushed higher for a fourth straight session yesterday. The NASDAQ and Russell 2000 led the other indices higher, with both adding 0.8% on the day. The Dow and S&P 500 both finished 0.7% higher. US equities are closed on Thursday for the Thanksgiving holiday, although there’s a shorter-than-usual session for stock index futures. Sentiment improved this week on the increased probability of a rate cut from the Federal Reserve next month.
“The CME FedWatch Tool, which uses real money flows to calculate the implied chances of rate changes, now gives an 85% chance of a 25-basis-point reduction in December, up from just 30% last week. The biggest part of the shift came after a speech last Friday from New York Fed CEO John Williams. Williams, a senior member of the Federal Reserve, appeared to open the door once again for another rate cut next month. His comments were a contrast to recent speeches from other Fed members, which were distinctly hawkish in nature. This seems odd.
“Yet analysts are convinced that he wouldn’t have been so explicitly dovish without getting the thumbs up from Fed Chair Jerome Powell. Ironically, at the end of last month, Powell used his post-FOMC press conference to dampen December rate cut expectations. This sudden shift in outlook would suggest that the Fed is now prioritizing concerns about the labour market over sticky inflation data.
“This week, Fed members Christopher Waller and Mary Daly followed John Williams in supporting the idea of an additional rate cut before year-end. This helped to bolster US equities going into the long holiday weekend. Despite this week’s recovery, November hasn’t been good for equities, with market darling Nvidia leading the decline. Despite a stellar set of third-quarter earnings, the chip designer at the vanguard of the Artificial General Intelligence (AGI) trade fell from a record closing high of $210 at the end of last month to break briefly below $170 on Tuesday. That’s a high-low decline of 19%.
“The selloff was triggered by some high-profile selling. But there are also concerns that Nvidia finally has some serious competition. Meta Platforms, an Nvidia customer, is talking to Alphabet’s Google about using its proprietary tensor processing units in Meta’s data centres. This looks like quite a specific deal, but it has certainly opened a breach in Nvidia’s near-monopoly. The share price has just experienced its worst run since late January, when Chinese startup DeepSeek launched a free AI assistant produced at a fraction of the cost of its US competition. When investors woke up to the implications of this, they sent Nvidia’s share price down 36% over the next six weeks. Could we be seeing something similar now unfolding?”
– David Morrison, senior market analyst at Trade Nation
