Introduction
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Market sentiment has turned sharply risk-off following the Federal Reserve meeting last Thursday, with Bitcoin dipping below $100K for the first time since June, briefly touching $99K before stabilising at $101-102K. The pullback has rippled across the broader market, with Ethereum sliding -16% on the week and testing the $3,000 level, while most altcoins have faced even steeper declines. The renewed wave of fear reflects a combination of post Fed uncertainty, profit taking by long-term holders, and technical breakouts failing to hold, creating one of the most volatile weeks of recent times.

U.S. Shutdown Extends to Record Length

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The U.S. government shutdown has now entered its 35th day, tying the record for the longest shutdown in history, last seen during President Trump’s 2018–2019 term. The ongoing political gridlock is adding pressure to global markets, and for crypto, the implications extend beyond traditional macro risk.

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Key economic functions are now frozen. Essential data releases such as jobs and inflation reports have been postponed, leaving traders navigating without key signals. Meanwhile, the SEC and CFTC are operating with minimal staff, delaying over 90 pending crypto ETF applications from issuers like BlackRock and Fidelity, which were originally expected to see approval in October. These delays have slowed institutional inflows, paused regulatory clarity, and created uncertainty across the digital asset space.

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While short-term volatility may persist, these disruptions often act as pressure build-ups; once resolved, the backlog of ETF approvals and regulatory actions could trigger a wave of renewed activity and capital inflows into the market.

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Fear Returns as Bitcoin Dips Below $100K

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Market fear has spiked again after another sharp sell-off. In the past 24 hours alone, 474,721 traders were liquidated, totalling over $2.04 billion in positions, a reminder of how heavily leveraged the market remains, even after the record liquidation event just a fortnight ago.

Following the largest dip in crypto history on Oct 10th, we’ve reiterated that Bitcoin has tended to lead market recoveries during periods of risk-off sentiment. In risk-off conditions, BTC typically provides upside exposure with reduced downside, as Bitcoin dominance (BTC.D) tends to rise regardless of market direction. That’s exactly what we’re seeing now, BTC.D has climbed back above 60%.

Technically, $108K has historically acted as a key resistance level. It served as the prior range high, with seven consecutive weekly candles closing above it before this week’s breakdown. The current weekly candle is trading below (~$102K), but it’s still early, as previous weekly closes above $108K have supported stronger market structures.

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On the downside, the 200-day moving average (MA) near $103K has once again proven its importance. As discussed in UpTrade Alpha recently, this has been a key structural level since early 2023, holding firm through every major retest.Today, BTC wicked down to the $98K low level and now has bounced back $102k.

If prices remain below $98K and the 200MA for an extended period, it could indicate that the market is consolidating or reassessing its trend. In the near term, many analysts are speculating that this volatility will likely pressure altcoins further.

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Fed Rate Cut Hawkish
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Markets have been volatile following the latest Federal Reserve decision, which delivered a widely expected 25bps rate cut, and they confirmed the end of quantitative tightening (QT) on December 1, ending three years of balance sheet reduction. On paper, this should have been a clear win for risk assets, but the tone and internal split within the Fed kept investors cautious. Something that doesn't often occur, the vote was divided. Some members argued for no cut, while others pushed for a deeper 50bps cut. That lack of unanimity, rare for the Fed, added an element of unpredictability and signalled that the central bank itself is still unsure about the strength of the economy.

Powell’s hawkish comments reinforced that uncertainty, saying a December cut “is not guaranteed,” which triggered over $400M in BTC and ETH long liquidations within two hours as traders de-risked. While his caution is standard, reflecting the Fed’s data-dependent approach, markets took it as a reason to pause after the recent rally.

Solana ETF Sees Strong First Week
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While Bitcoin and Ethereum ETFs faced profit-taking pressure this week, recording $1.6B and $360M in net outflows respectively, Solana stood out as the clear exception. The newly launched Solana Bitwise spot ETF brought in over $325M in inflows during its first week of trading, marking one of the strongest debuts for any crypto ETF this year. The early demand highlights Solana’s growing institutional presence and validates its position as a leading alternative to BTC and ETH in this cycle. Meanwhile, BlackRock is preparing to launch a Bitcoin ETF in Australia later this month, showing the continued global expansion of regulated crypto investment products.

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Long-Term Holders Take Profits
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On-chain data shows long-term Bitcoin holders (LTHs) have begun taking profits after months of steady accumulation. Over the past 30 days, wallets holding BTC for 155+ days have sold roughly 400,000–405,000 BTC, equivalent to around $42B at current prices near $104K. The Long-Term Holder Net Position Change metric has turned sharply negative, signalling the largest wave of LTH distribution since January 2025. While this level of selling can create short-term headwinds, it’s not necessarily bearish , similar profit-taking periods in March and December 2024 were followed by healthy market resets and renewed uptrends.

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