Market Sees V-shaped Rebound, Four Positive Catalysts Could Fuel Future Gains?
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Market Sees V-shaped Rebound, Four Positive Catalysts Could Fuel Future Gains?
The Federal Reserve may continue cutting interest rates this month.
Navigating Web3 tides with focused insightsWritten by: 1912212.eth, Foresight News
After the crypto market saw over $1.7 billion in liquidations on December 10, a large amount of leveraged positions were forcibly closed, and market health metrics have since returned to normal. Today, Bitcoin surged past $100,000 again, rising nearly 5% in 24 hours, while ETH climbed above $3,900 with a gain of over 7%. Ethereum's strong performance led a broad rally across altcoins: among public chains, SOL rose over 6%, SUI surged more than 30% to a new all-time high, and SEI gained over 14%. In the AI sector, WLD rose over 16%, IO jumped over 23%, and ARKM increased over 12%.
The Ethereum ecosystem—including DeFi, restaking, Layer 2s, and stablecoins—also experienced broad gains. EIGEN rose over 22% in 24 hours, ENA surged over 21%, while OP and ARB each posted gains of around 10% or more.
In terms of derivatives data, CoinGlass shows total liquidations across all exchanges amounted to $228 million in the past 24 hours, with $154 million coming from long (bullish) positions.
With widespread market gains, sentiment is shifting once again from skepticism to optimism. What’s driving this move?
Spot Bitcoin and Ethereum ETFs Continue to See Strong Net Inflows
Spot Bitcoin ETF inflows are a key indicator of institutional capital entering the market. Since November, there have been only seven days of net outflows—most of them relatively small in size.
By contrast, the number of days with net inflows far exceeds those with outflows. Notably, since November 27, spot Bitcoin ETFs have recorded nine consecutive days of net inflows, signaling sustained capital inflow. To date, cumulative net inflows into spot Bitcoin ETFs have reached $34.45 billion.
Spot Ethereum ETFs, which were initially met with indifference and languished for months, are now also seeing significant net inflows.
Since November 22, spot Ethereum ETFs have registered 12 consecutive days of net inflows, including three days where daily inflows exceeded $300 million. So far, total net inflows into spot Ethereum ETFs have reached $1.89 billion, with daily trading volume surpassing $470 million.
This sustained off-exchange capital inflow has played a significant role in pushing up Ethereum's price.
CPI Data Meets Expectations; Fed Likely to Cut Rates Again This Month
Last night at around 9 PM, the U.S. reported its November unadjusted CPI year-on-year rate at 2.7%, marking a second consecutive monthly increase and reaching a four-month high—fully in line with market expectations.
While this represents a notable rise, it is unlikely to deter the Federal Reserve from cutting rates next week. The disinflation process toward the Fed’s 2% target has effectively stalled in recent months. However, the Fed is now placing greater emphasis on labor market conditions. Job growth accelerated in November after being severely disrupted by strikes and hurricanes in October, but the unemployment rate rose to 4.2% after holding steady at 4.1% for two consecutive months.
Goldman Sachs analyst Whitney Watson stated that today’s CPI data clears the way for a rate cut next week. Following the data release, the Fed will enter its "quiet period," during which officials refrain from public commentary. Yet, she added, “The Fed remains confident in the disinflation process. We believe the central bank will continue gradually easing monetary policy into the new year.”
Yesterday, traders increased their bets on a December rate cut by the Fed. The swap market now prices in a 96.4% probability of a rate cut this month, up from 86.1% before the CPI release.
Another rate cut by the Fed would undoubtedly boost market liquidity and benefit the crypto market.
Trump-Linked Crypto Project WLFI Buys Ethereum and DeFi Tokens
Donald Trump is set to assume the U.S. presidency, and his associated crypto project, WLFI, is drawing increasing market attention. Trump’s youngest son recently spoke at the Bitcoin Middle East & North Africa conference, expressing strong belief in Bitcoin: “BTC will reach $1 million. It’s a better investment than real estate. Those who embrace crypto early will succeed.”
Just one day later, WLFI took concrete action. According to Lookonchain, within the past 10 hours, a wallet linked to WLFI spent $10 million to purchase 2,631 ETH at an average price of $3,801. It also bought 41,335 LINK worth $1 million at an average cost of $24.20 per token, and $1 million worth of AAVE at an average price of $297.80.
As of now, LINK is trading at $26.70—a 24-hour gain of over 20%—while AAVE trades at $332, up over 22% in 24 hours.
Given Trump’s immense influence, future fund movements by WLFI are likely to attract even greater market attention and impact.
Alipay Displays Cryptocurrency Fund Advertisement on China Mainland
An advertisement for a cryptocurrency-related fund appeared today on the homepage of Alipay’s fund section in mainland China, sparking significant discussion online. Some users reported seeing a banner reading: “Global Investing, Cryptocurrencies Surging—Start with Just 10 RMB.”
Upon verification, the fund is identified as Huabao Overseas Tech C (QDII-FOF-LOF), a compliant product designed for investing in overseas assets. It indirectly holds shares in Coinbase and the ARK Invest spot Bitcoin ETF. Currently, daily purchases are capped at 1,000 RMB per person.
It is well known that mainland China maintains strict regulations on cryptocurrencies, banning all cryptocurrency exchange activities and token promotions. The appearance of such a crypto-linked fund ad on Alipay’s front page has led many to speculate whether China may be considering opening limited investment channels into the crypto market.
Outlook for Future Market Trends
Juan M. Villaverde, Weiss Crypto analyst, commented on the recent market dip, stating that $100,000 is a critical level for Bitcoin. If Bitcoin can break and hold above this level, the current altcoin rally may continue. Conversely, failure to sustain this level could lead altcoins to retrace back to their starting points.
Matrixport emphasized Ethereum’s potential for substantial price appreciation in 2025. The inflows into spot Ethereum ETFs may reflect a strategic rebalancing or expansion of investment mandates, aligning with U.S. mutual funds’ new fiscal year beginning December 1. This trend reflects growing market optimism about 2025. Should this demand persist, Ethereum’s price could see significant upside next year.
Bitwise remains highly optimistic and predicts that Bitcoin, Ethereum, and Solana will all reach new all-time highs in 2025, with the following price targets:
· Bitcoin: $200,000
· Ethereum: $7,000
· Solana: $750
These analyses and forecasts are not investment advice. Market volatility remains high during bull cycles, and investors should prioritize risk management.
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