Bitcoin's price stabilizes after a 30% drop, driven by expectations of US rate cuts and signs of recovery in investment flows.
Those who follow the crypto market will have noticed that Bitcoin has experienced a significant decline since mid-October, reducing its price by around 30%, despite having reached all-time highs of $126.000.
However, the cryptocurrency is now beginning to show signs of stabilization, supported by a key factor: expectations that the US Federal Reserve (Fed) will cut interest rates in December, with the probability of this now rising to 75%. This shift in the monetary landscape is generating relief in digital markets, which see the Fed's policy as a potential catalyst for a return to the upward trend.
Take advantage of the BTC rally: trade hereBitcoin and the crypto market hit by fund outflows
Digital asset investment products saw outflows of $1.940 billion last week, bringing the total to $4.920 billion over the past four weeks. This represents the third longest streak of departures in these investment funds since 2018, which, according to James Butterfill of Coinshares, reflects the magnitude of the pressure the sector has faced in recent weeks.
Bitcoin and Ethereum led these outflows, with $1.270 billion and $589 million respectively, while Solana lost $156 million. In contrast, XRP managed to attract $89,3 million in inflows, bucking the overall trend.
El report The firm emphasizes that this scenario of massive outflows has reduced total assets under management by 36%, highlighting the combination of falling prices and institutional divestment. Even so, the year-end balance remains positive, as digital investment products are projected to attract $44.400 billion in inflows during 2025, demonstrating that, despite recent volatility, structural interest in the sector persists.
The last day of last week marked a nascent shift in sentiment, as after seven consecutive days of outflows, inflows of $258 million were recorded, with Bitcoin leading the recovery by capturing much of this capital. This rebound, albeit moderate, suggests that some investors are beginning to reposition themselves in anticipation of a more favorable monetary environment.
The narrative behind the optimism in Bitcoin
Beyond investment flows, the derivatives market is offering clues about the sentiment of cryptocurrency traders. The Bitcoin options position remains clearly bullish: open interest in year-end call contracts is concentrated between $85.000 and $200.000, reflecting that many traders are still betting on a significant rally.
Other indicator Relevant is the negative funding in futures markets, which shows that Excessive leverage in long positions has been eliminated.This adjustment, according to many experts, such as those at QCP, reduces the risk of further massive sell-offs and opens up space for a more orderly recovery.
However, the decisive factor stems from US monetary policy. Recent comments from the Fed have raised the probability of a December rate cut to 75%, fueling expectations of greater liquidity and less pressure on risk assets like Bitcoin. In a context where the leading cryptocurrency had lost momentum after reaching all-time highs, this signal is interpreted as a potential turning point.
Source: Coingecko
The pulse of the crypto market
The performance of Bitcoin and the crypto market in general will now depend on two key elements. On the one hand, upcoming US macroeconomic data, such as retail sales and the Consumer Price Index, will be crucial in confirming whether the Fed maintains its shift toward a more accommodative policy. On the other hand, capital flows into Bitcoin ETFs could turn positive and offer additional support for the cryptocurrency's recovery.
The combination of technical and macroeconomic factors also creates a scenario of restrained expectations. While the 30% drop left scars on the market, the reduction of leverage and the return of inflows into investment products suggest that the ecosystem is seeking a new equilibrium. The question is whether this initial rebound will become a sustained trend or if it is merely a temporary bounce amidst the volatility.
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