The Fed's expectations for interest rate cuts are favourable information for global risk assets, and the total market capitalization of crypto assets has returned to 3 trillion USD.

On November 26, influenced by the rising expectations of a rate cut from the Fed, global risk assets experienced a broad rally. The MSCI World Stock Index rose for four consecutive days, the dollar index fell to a new monthly low, and the total market capitalization of Crypto Assets increased by 52 billion dollars in a single day to 3 trillion dollars. Bitcoin rebounded to 87,600 dollars, and the meme coin BONK unexpectedly experienced a big pump of 14.5%, significantly improving market sentiment. Analysts point out that weak American consumer data and the selection of a dovish Fed chair have jointly driven the market's bets on a rate cut in December, with the probability soaring to over 90%.

Global Market Shift: Driven by Economic Data and Policy Expectations

Global stock markets continued their upward trend this week, with the MSCI World Stock Index achieving four consecutive days of rise, narrowing the decline to 1.3% since the beginning of this month. The Asian markets performed particularly strongly, with Asian stock indices rising 1.4% in a single day, closely following the positive trend from Wall Street the previous night. S&P 500 futures and European stock futures both point to further rises, indicating that market optimism is spreading. This global risk appetite rebound is mainly due to two key factors: weaker-than-expected U.S. economic data, and the news that Kevin Hassett, director of the White House National Economic Council, is the frontrunner for the next Fed chairman.

The bond market also reflects expectations of a shift in monetary policy. The yield on the 10-year U.S. Treasury bond fell below 4% on Tuesday, marking the first time in nearly a month that this key psychological level has been breached, indicating that bond investors are positioning themselves ahead of the interest rate cut cycle. The decline in Treasury yields typically means lower financing costs, which is particularly beneficial for growth assets, especially tech stocks and Crypto Assets. The U.S. dollar index continued its downward trend, falling 0.2% on Wednesday, after a 0.3% drop the previous day. The weakness of the dollar provides additional valuation support for Crypto Assets priced in dollars.

In terms of economic data, the U.S. consumer confidence index for November experienced its sharpest decline since April, and retail sales in September showed only a slight increase. These signs indicate that consumer spending is cooling off after several months of strong demand. The U.S. government shutdown has disrupted the release schedule of economic data, making these delayed reports particularly significant ahead of the Fed's December meeting. Fed Governor Stephen Milan reinforced this outlook, reiterating his belief that the U.S. economy needs significant interest rate cuts, resonating with market expectations.

From a historical perspective, the current market's shift in expectations regarding Fed policy is not an isolated case. KCM Trade's chief market analyst Tim Water pointed out: “In the past week, the market has made a U-turn in its views on the likelihood of a Fed rate cut in December and the earnings outlook for the tech sector.” The rapidity of this shift is indeed remarkable—just before the Fed policy meeting in October, investors had viewed a rate cut in December as a certainty, but then hawkish sentiment erupted, causing the odds to briefly drop below 30%, and now they have soared back to over 90%.

Overview of Key Market Indicator Changes

MSCI Global Index: Rose for 4 consecutive days, with the monthly decline narrowing to 1.3%

US 10-year Treasury yield: fell below 4%, the first time in nearly a month.

Dollar Index: A cumulative fall of 0.5% over two days

Gold price: rise of 0.9% to $4166/ounce

Fed's December rate cut probability: soared from below 30% to over 90%

Bitcoin price: rebounding to $87600

Crypto Assets total market capitalization: rise of 52 billion dollars in a single day.

Crypto Assets Market Correlation Bounce: Traditional Funds Flow into Digital Assets

The correlation between the crypto asset market and the traditional financial market has been vividly demonstrated in this rebound. The total market capitalization (TOTAL) grew by $52 billion within 24 hours, reaching $3 trillion and attempting to convert this into a support level. This change marks the restoration of market confidence and the emergence of early bullish signs. From the perspective of fund flow, this synchronized rebound is not a coincidence - when the traditional stock market rises due to improved liquidity expectations, some funds naturally overflow into the highly correlated crypto asset market.

Bitcoin, as a market barometer, is currently trading around $87,609 and has successfully held the key support level of $86,822. The king of encryption is showing early signs of recovery, moving towards the $90,000 region, as overall market sentiment gradually improves. From a technical analysis perspective, Bitcoin needs to break through the resistance level of $89,800 and convert it into support to confirm the continuation of the rise trend. If it can further convert $91,521 into a solid bottom, it will strengthen the bullish momentum.

The meme coin sector unexpectedly became the highlight of this round of rebound. BONK rose by 14.5% in 24 hours, reaching $0.00001015, attempting to convert $0.00001013 into a new support level. Nevertheless, BONK still needs to recover from the recent 35.4% fall; to regain lost ground, the price must climb to $0.00001353 and break through several key resistance levels in the process, starting with $0.00001103. Strong capital inflows and market confidence are crucial for this.

The internal dynamics of the market also provide an interesting perspective. A multi-signature wallet associated with the collapsed LIBRA meme coin transferred $9 million in SOL after being idle for nine months, coinciding with U.S. authorities considering freezing the related funds. Analysts believe these transfers seem aimed at obscuring the whereabouts of the funds, adding new complexities to the ongoing federal investigation. Such activity typically occurs at market turning points and may be some investors attempting to adjust their positions as liquidity improves.

Bitcoin Key Technical Position Analysis: Long and Short Battle at Resistance Level

From a technical analysis perspective, Bitcoin is at a critical decision point. The current price level of $87,600 is right near the 50-day moving average, which is widely regarded as a barometer for mid-term trends. If it can hold this position, the next target will be the resistance level of $89,800 — the lower boundary of the consolidation range before the decline in mid-November. Breaking through this resistance is crucial for restoring market confidence, as it would mean the bulls have regained control.

On-chain data provides fundamental support for technical analysis. According to Glassnode statistics, the cost basis of short-term Bitcoin holders (addresses holding for less than 155 days) is concentrated in the range of $85,000 to $87,000. This means that the current price is close to the breakeven point for this batch of recently entered investors. If the price can stabilize here, it will reduce the pressure of panic selling. At the same time, long-term holders continue to show strong holding faith, with Bitcoin held for more than a year accounting for 68% of the total Bitcoin supply, nearing historical highs.

The derivatives market is also sending out positive signals. The funding rate for Bitcoin perpetual contracts on major CEXs has rebounded from negative territory to a slight positive, indicating that the bullish sentiment among leveraged traders is recovering. The put/call ratio in the options market has also fallen from a high of 0.65 to 0.55, showing that investors are reducing hedging activities and concerns about future volatility have eased. The normalization of these derivatives indicators is important evidence of a healthy market correction rather than a trend reversal.

From the perspective of macro liquidity, the negative correlation between Bitcoin and US Treasury yields has strengthened again. When the 10-year US Treasury yield falls below 4%, Bitcoin often performs strongly, as the low interest rate environment increases the attractiveness of non-yielding assets. If the Fed indeed begins a rate-cutting cycle in December, this negative correlation may further strengthen, making Bitcoin one of the tools for traditional investors to hedge against interest rate risks.

Meme Coin Volatility Analysis: Risks and Opportunities Behind the Big Pump of BONK

BONK's 14.5% big pump stands out in the meme coin sector, but the rebound of such a highly volatile asset often comes with special logic. According to on-chain data, the number of large transactions for BONK increased by 300% in the 24 hours before the rebound, indicating that whale players may have positioned themselves in advance. At the same time, the number of active addresses holding BONK grew by 15%, showing that retail investor participation enthusiasm is also on the rise. This trend of both large and small investors moving in tandem is usually a positive signal for the continuation of short-term trends.

From a fundamental perspective, BONK, as a representative meme coin of the Solana ecosystem, is closely related to the activity of the Solana network. In November, the number of daily active addresses on Solana remained above 1.2 million, and the monthly trading volume of decentralized exchanges exceeded $45 billion, providing a good development environment for tokens within the ecosystem. Notably, BONK recently announced collaborations with several Solana ecosystem projects to integrate it as a community reward token. This expansion of utility may provide support for its price beyond the realm of pure meme.

However, the investment logic of meme coins is always accompanied by high-risk warnings. Although BONK rebounded today, it is still down more than 35% from last month's high, and to fully recover its losses, it needs to break through multiple resistance levels such as $0.00001103 and $0.00001245. If bullish momentum weakens, BONK may struggle to maintain its rebound, and the price could fall back to the support level of $0.00000885. Losing this area would invalidate the bullish argument and expose the meme coin to further downside risks.

From a market cycle perspective, the strong performance of meme coins usually occurs in the early stages of improved market sentiment. When investors' risk appetite rebounds but they are worried about missing the rebound, high-beta meme coins often become the preferred targets. Historical data shows that after Bitcoin breaks through key resistance levels, the average performance of the meme coin sector typically outperforms the broader market, but the sustainability of this excess return highly depends on the degree of improvement in the overall market environment.

Institutional Dynamics Tracking: Further Integration of Traditional Finance and the Crypto World

The latest actions of traditional financial institutions provide more dimensions for understanding the market. Data shows that Strategy (formerly MicroStrategy) continues to increase its holdings of Bitcoin, with a total holding of over 640,000 coins, worth approximately $56 billion. Notably, despite holding a massive amount of Bitcoin, the company is still excluded from the S&P 500 index, while SanDisk saw its stock price rise by 9% due to its inclusion in the S&P 500 index components. This comparison highlights that the traditional financial system's acceptance of Crypto Assets remains limited.

In terms of central bank policies, the Reserve Bank of New Zealand lowered interest rates to a three-year low to support the nascent economic recovery, while the New Zealand dollar rose due to market expectations that the easing cycle is nearing its end. The South Korean Finance Minister stated that authorities are closely monitoring any speculative, one-sided currency movements, emphasizing that the country is ready to take action when the won falls to near a seven-month low. The policy trends of these Asia-Pacific economies provide important references for the global liquidity environment.

Corporate-level news is also worth noting. Alibaba reported a 34% rise in its cloud business, surpassing expectations and offsetting the impact of profit decline, as the company increased spending on consumer subsidies and data centers to capitalize on the AI boom. HP's profit outlook for the year did not meet estimates, and it stated that it would lay off 4,000 to 6,000 employees by fiscal year 2028 by using more AI tools. Dell Technologies has raised its annual forecast for the critical artificial intelligence server market, indicating sustained demand for such machines amid the current data center boom.

These corporate dynamics have an indirect but important relationship with the Crypto Assets market. The increase in AI-related investments has driven the demand for high-performance computing, which in turn strengthens the narrative of decentralized computing networks and AI + blockchain projects. Meanwhile, the consumer trends and capital expenditure plans revealed in corporate financial reports provide clues for assessing macroeconomic directions and the outlook for risk assets.

Market Outlook: Analysis of the Sustainability of Liquidity-Driven Trends

Looking ahead, market trends will largely depend on three main factors: the Fed's policy path, economic data performance, and geopolitical developments. Regarding the Fed's policy, the market has largely priced in a rate cut in December, with attention turning to the extent of the cut (whether 25 or 50 basis points) and subsequent policy guidance. Historical experience shows that within six months of the Fed starting to cut rates, the average return on risk assets can reach 15%, but the initial phase is often accompanied by increased volatility.

In terms of economic data, due to the disruption of data release rhythm caused by the U.S. government shutdown, the market is, as Pepperstone Group Ltd strategist Dilin Wu put it, “like flying half-blind.” The sustainability of the rebound “ultimately depends on whether the upcoming data confirms the soft landing narrative.” Key indicators include employment data, inflation metrics, and consumer confidence; any unexpectedly strong data could shake current interest rate cut expectations and trigger a market repricing.

Geopolitical factors cannot be ignored. Crude oil prices have stabilized after falling to a one-month low, as there are signs that a peace agreement in Ukraine is making progress. Easing geopolitical tensions typically benefits risk assets, as it reduces uncertainty in the global economy. However, any reversal could quickly change market sentiment, especially in the Middle East and other sensitive areas.

For the cryptocurrency market, breaking through the total market capitalization of 3 trillion dollars has significant psychological meaning. If it can firmly stand at this level, the next target will be 3.05 trillion dollars, which requires Bitcoin to break through 90,000 dollars and Ethereum to return to above 4,000 dollars. The flow of institutional funds will be key—if Bitcoin spot ETFs resume inflows, it will provide a stronger foundation for this round of rise. Conversely, if uncertainty returns, the market may struggle to maintain the current level, and the possibility of falling back to 2.87 trillion dollars or even 2.80 trillion dollars will increase.

As the global market rejoices over the Fed's interest rate cut expectations, cryptocurrency investors should maintain a sense of calm while enjoying the rebound. History has repeatedly shown that while the rise based on liquidity expectations can be rapid, its sustainability will ultimately be tested by economic fundamentals. In the interconnected dance between the stock market and cryptocurrencies, the true winners may be those who can distinguish between liquidity-driven and value-driven movements, and maintain strategic composure amidst market fluctuations. The current market environment resembles a carefully choreographed ballet—magnificent yet fragile, with each step requiring precise handling of the complex rhythms of monetary policy, economic data, and geopolitics.