Global markets opened December on the defensive. U.S. equity futures are red as traders brace for a heavy macro week, Treasury yields are inching higher, and risk sentiment remains fragile. Overseas, hawkish signals from the Bank of Japan rattled global bond markets, a ripple that’s now hitting equities and crypto alike.

Crypto mirrored the broader risk-off tone. Bitcoin slid roughly 5 to 6 percent into the morning session, falling below 87K, with ETH down a similar amount. Nearly every major altcoin followed lower. This is not a crypto-native breakdown; it is macro-driven flows, elevated correlations, and liquidity aversion dominating price action.

• BTC and ETH lead the sell-off

Crypto begins December under heavy pressure as macro volatility drags high-beta assets lower.

• Altcoins broadly bleeding

Rotations are stalled, liquidity is thin, and sentiment is shaky heading into a macro-heavy week.

• Ethereum ecosystem catalysts ahead

The Fusaka upgrade and ecosystem developments could become stabilizing forces once macro conditions settle.

• Institutional flows in wait mode

Funds are sidelined until Powell’s direction becomes clear.

• U.S. stock futures dip

Markets open cautiously ahead of Powell’s remarks and a week loaded with economic data.

• Treasury yields edge higher

Adding pressure to equities and signaling that traders are not fully embracing a dovish pivot yet.

• Global markets soften

European and Asian sessions turned lower after tightening signals from the Bank of Japan disrupted bond markets and added global stress.

Jerome Powell speaks, coinciding with the official end of Quantitative Tightening. Markets want clarity on whether the Fed confirms the easing path.

ADP Employment Report and ISM Services PMI

Key readings that shape expectations for labor-market strength and economic resilience.

Unemployment Claims

A rising trend would reinforce the case for rate cuts.

PCE Inflation (delayed release)

The Fed’s preferred inflation gauge and the most important data point of the week. This print could anchor or unwind December rate-cut expectations.

Crypto continues to move as a macro proxy rather than a standalone asset class. Until Powell speaks and this week’s data clarifies the liquidity path, volatility will remain elevated. The end of QT and an 85 percent rate-cut probability are meaningful signals, but the market needs confirmation before committing to a full risk-on shift.

If the Fed leans dovish, December becomes a reset month for crypto. If the tone is uncertain or hawkish, caution remains appropriate as the market waits for a definitive liquidity turn.

The CME FedWatch Tool now shows an 85% probability of a December rate cut, and the Fed has officially ended Quantitative Tightening (QT). Together, these signals mark the first real shift toward an easing cycle. Liquidity is no longer shrinking and expectations alone can start repricing risk. Crypto historically leads in new liquidity cycles, making December a potential launchpad for stabilization, rotation, and early-stage growth across BTC, ETH, and selective altcoins.

Markets are entering December with a clear message: the tightening era is ending. An 85% implied probability of a rate cut is the market’s way of saying it believes the Fed can no longer maintain restrictive policy without risking broader economic damage. With QT officially ending, the liquidity drain that has pressured risk assets all year stops instantly. Even before a single rate cut arrives, this shift from “shrinking liquidity” to “neutral liquidity” changes institutional behavior and investor psychology.

QT ending is more impactful than most headlines imply. It means bank reserves stop falling, dollar liquidity stops contracting, and global funding conditions stabilize. Once the first cut arrives, the system pivots from neutral into gradual expansion the exact environment crypto has historically thrived in. After months of macro headwinds, this is the clearest sign yet that the monetary tide may finally be turning.

Crypto has spent the last month reacting to every hawkish signal, every liquidity squeeze, and every macro shock. But when easing expectations rise this sharply, the market’s asymmetry flips. A confirmed rate cut weakens the dollar, compresses real yields, and encourages capital rotation back into growth assets. BTC typically absorbs that first wave, followed by ETH as liquidity expands, and then selective altcoins as traders move further out along the curve.

This is where December becomes strategically important. A dovish confirmation from Powell could reset sentiment and spark inflows into ecosystems with real traction L2 scaling networks, AI-aligned tokens with compute demand, RWA protocols offering real yield, and high-performance emerging chains like Monad or Hyperliquid. Tightening regimes punish experimentation; easing regimes accelerate it. December could be the point where that pendulum finally swings back.

Institutions don’t wait for the second or third rate cut they move when the regime changes. If Powell confirms QT is over because the Fed aims to stabilize financial conditions, allocators will view this as a soft pivot. If he signals that the December cut is part of a broader easing path, institutions will start positioning into year-end.

That dynamic creates a powerful setup:

Crypto sits directly at the intersection of these incentives and historically leads the risk-on rotation when liquidity shifts, not after.

The importance of December isn’t in whether prices explode immediately it’s in the confirmation of a new liquidity trajectory. Once QT ends and the first rate cut hits, markets begin pricing the next cycle months in advance. BTC and ETH steady first, selective altcoins follow, and narratives regain oxygen as capital returns to builders, ecosystems, and early-stage innovations.

This month could be the transition point: not the completion of a cycle, but the beginning of a new one. If expectations hold and the Fed validates this path, crypto is positioned to lead the re-risking phase into 2026.