Investors in the first half of the week expected Federal Reserve interest rate decisions. Stock indices and digital currencies traded mostly in a narrow range as market activity remained weak.
According to CME estimates, the probability of a 25 basis point cut in the key interest rate was about 87%.The easing of monetary policy on December 10 created conditions for capital to return not only to US assets but also to digital currencies.
December 8-9 Bitcoin (BTC) on the MEXC exchange bargained in the range of 90,500 to 92,500 USDT. The RSI index was in the neutral zone, meaning a wait-and-see approach was prevalent among traders.
Source: MEXC
- Following the interest rate cut, targeted activity on the internet may intensify in the near future. If capital flows into IT stocks, bullish investors will also take the lead in the digital currency market.
The famous Santa Claus rally may occur in the second half of December. A similar situation occurred at the end of 2024.
According to the Trader’s Almanac, in the last trading days of December, the S&P 500 and Nasdaq indices updated the maximum. Investors then reacted positively to Donald Trump’s victory in the US presidential election.
- Bitcoin and other cryptocurrencies also entered a growth phase, but by early January the rally had run out of steam, and traders began taking profits.
- A similar scenario could await us this year, but growth may be less aggressive than last December.
However, global uncertainty factors that could weaken growth or even cancel the Christmas rally cannot be discounted, the MEXC Research team notes.
- In this analytical digest, we examine the potential of digital currencies in the context of Fed easing.
- Our team pays special attention to analyzing Bitcoin network metrics and their impact on the coin’s financial performance.
- We will separately analyze the sentiment on social media and the behavior of some first- and second-tier altcoins.
Whales and sharks returned to hoarding tactics in December
The fall of Bitcoin (BTC) was triggered by aggressive sell-offs involving large and medium-sized wallets.
Last month, the largest digital currency fell below $82,000, It wasn’t until late November that investment in the largest digital currency began to grow again. Ultimately, the coin managed to jump above $90,000.
Bitcoin’s November drop was the result of a dump by whales and sharks whose wallets held more than 10 BTC.
According to Santiment, whales and sharks began selling cryptocurrency on October 12. In a month and a half, they sold approximately 113,070 coins.
- In December, medium and large addresses changed their tactics and resumed accumulating bitcoins. Since the beginning of the month,They purchased 47,584 BTC.
- On the contrary, the shrimps holding up to 0.01 BTC bought Bitcoin in the second half of November and only started taking profits last week.
- The increase in whale support in December was one of the main factors contributing to strengthening of the BTC rate, notes the MEXC Research team.
- We remind retail traders that they can monitor the behavior of whales and sharks to quickly respond to market changes.
- When these investor cohorts buy, the cryptocurrency gains in value. Conversely, if whales and sharks sell together, the asset begins to decline.
Despite the weakening correlation between Bitcoin and the S&P 500, the largest digital currency remains dependent on the US stock market.
According to the platform CryptoRank, In November, the correlation between the two assets weakened periodically, but by the end of the month it strengthened again.
- This trend is likely to continue in December, and Bitcoin will not be able to completely disengage from IT stocks.
Another factor contributing to the gradual return of the bullish scenario is the reduction in the exchange balance of cryptocurrency.
- When sellers dominate the market, the number of coins on trading platforms increases. But as soon as the outflow of digital currency from exchange addresses to cold storage resumes, the trend reverses, and the asset begins to strengthen.
BTC’s approach to $90,000 coincided not only with whale swims, but also with a reduction in the asset’s exchange balance.
While 1.8 million BTC were held on exchanges at the beginning of December 2024, this volume now stands at 1.2 million BTC – just over 6% of the cryptocurrency’s market turnover.
In 2025, traders periodically sent coins to exchanges for subsequent sale to lock in profits or exit the asset. However, overall, most wallets preferred to store coins offline.
In about a year, the exchanges left more than 403,200 BTC, Thus, the volume of cryptocurrency available for sale has decreased.
- The outflow of BTC to cold wallets helps ease the pressure, and the asset is able to minimize the risk of a new retreat.
- If the outflow of coins into over-the-counter storage increases, the digital currency may strengthen its position on the market.
ETH address activity fell to a 10-month low.
Address activity on the Ethereum network has been weakening in the first half of the week, leading to a narrowing of the amplitude of fluctuations in the underlying digital asset, Ether (ETH).
On the stock exchange MEXC On December 10, ahead of the Federal Reserve’s decision to cut the interest rate, the ETH rate strengthened above 3,100 USDT during Asian trading.
- Last week, the altcoin fell to 2915 USDT. This mark became a local bottom, as after reaching it, Ethereum quickly rebounded above 3000 USDT.
- The Relative Strength Index (RSI) fell below 20 during the altcoin’s retreat, signaling to traders unwilling to accept further losses. They began buying at comfortable prices, and Ethereum was able to recover its earlier losses this week.
- However, by Monday, December 8, volatility had weakened, and blockchain address activity had dropped to its lowest level since March.
Source: CryptoQuant
According to the CryptoQuant platform, the number of addresses participating in transactions daily has decreased to 265,741.
It was only after the Fed announced monetary easing that network activity began to pick up and the number of ETH wallets regularly sending and receiving funds approached 320,000.
The pressure Ethereum faced in November was caused not only by whales and sharks selling ETH and BTC, but also by an outflow of funds from the ETH 2.0 deposit contract.
Source: CryptoQuant
Cryptocurrency TVL volume fell to its lowest level since July – 35,916 million ETH. That is, traders withdrew coins from the contract and sold them on exchanges.
It is popular among experts point of view, that the support zone for Ethereum is at $2800, and a strong resistance zone has formed in the $3180 region.
Source: X
If the largest altcoin overcomes the nearest barrier and breaks through the next pressure zone at $4800, then it will have chances will appear to reach $6,800 or even $8,800 in the long term.
- As with Bitcoin, the whale support factor should be decisive for Ethereum.
According to Santiment, addresses with balances between 1,000 and 10,000 coins returned to accumulation in December.
Source: Santiment
Sharks and whales dumped 1.3 million ETH at the beginning of October, but in the second half of November they changed tactics and acquired about 450,000 ETH.
At the same time, the Ethereum ecosystem’s growth rate reached a five-month high. In December, approximately 190,000 new wallets were registered on the network daily.
After the update Fusaka ETH course strengthened a little, However, the cryptocurrency has not achieved significant success.
- At the first stageAn investment rally is expected for Bitcoin, and only in the second stage of the rally can we expect a new alt-season, notes the MEXC Research team.
- Demand for Ether will increase if trader activity increases in the DeFi and NFT markets.
The funding rate for perpetual swaps on the MEXC is in the positive zone.
Source: MEXC
- Continued bullish sentiment in the crypto derivatives market is creating conditions for more active capital inflows into digital assets on spot markets.
- A significant event for ETH would be a jump above $3,500. In this case, we could expect not only a rise in BTC, but also a surge in Ethereum as part of the long-awaited Santa Claus rally.
XRP was one of the hardest-hit altcoins.
Among the top-tier altcoins, XRP was one of the hardest hit. Its price at the end of November fell to $1,875 – this is the lowest figure since the beginning of April 2025.
The altcoin’s price has plummeted by approximately 32% over the past two months, sparking a backlash on social media.
Source: MEXC
According to Santiment, in November, Telegram, X, Reddit and 4Chat dominated pessimistic moods.
The number of posts oriented towards a bearish scenario significantly exceeded the number of positive comments.
- Typically, during such periods, the digital currency reaches fundamental values, as traders who had been aggressively selling due to fears that the asset would continue to decline leave the market.
Source: Santiment
Whales also sold in October and November. The number of wallets with balances over 100 million coins decreased by more than 20%.
However, whale wallets are still holding more than 48 billion XRP – this is the highest figure since 2019.
Source: Santiment
Large investors refrained from large-scale selling, so the coin quickly found a bottom and began to strengthen after a brief consolidation.
The altcoin’s rebound above $2 in early December suggests that XRP, amid the negative social media sentiment, has bottomed out, and the sell-off has gradually given way to cryptocurrency accumulation.
Source: CryptoQuant
Now the coin is trying to approach the first zone of strong resistance formed in the range from $2.50 to $2.60.
If XRP attempts to break through this barrier, traders who are currently losing money will try to cut their losses and start selling.
- XRP Exchange Balance Growth hints in preparation for a dump that could happen in the coming days if the Fed cuts rates and the asset is able to strengthen.
- According to CryptoQuant, the volume of cryptocurrency on exchanges increased to 2.693 billion XRP on December 10. The number of active addresses on the Ripple network increased up to 21,885.
- The gradual increase in the number of wallets participating in transactions daily indicates that asset holders are preparing for volatility, notes the MEXC Research team.
The memecoin market is recovering from the decline.
In mid-autumn, the market capitalization of memecoins fell below $42 billion (according to CoinMarketCap).
The market began to gradually recover in December, but investment remained weak as traders awaited the Fed’s rate decision.
Source: CoinMarketCap
Bullish activity will begin to increase if investment in Bitcoin and Ethereum increases.
- The largest memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) strengthened in the middle of this week to $0.1456 and $0.00000856, respectively.
- The top five joke digital currencies also include Pepe, MemeCore, and OFFICIAL TRUMP.
Open interest in DOGE and SHIB futures increased to $1.47 billion and $92.43 million on December 10. (according to CoinGlass).
Source: CoinGlass
On the MEXC exchange, interest in DOGE futures rose to $68.08 million today, and the amount of deployed contracts for SHIB reached $7.69 million.
Perpetual Swap Financing Rates are holding on in the positive zone for each digital asset.
- Speculators’ interest is growing against the backdrop of the Federal Reserve’s rate cut.
- Investors expect capital to flow not only into stock markets, but also into cryptocurrencies.
Source: MEXC
During bullish periods, ecosystems related to artificial intelligence (AI) and memetic coins typically enjoy great popularity among traders, notes the MEXC Research team.
According to analysts, the nearest resistance zone for Dogecoin has formed at the level of $0.20.
$11.72 billion in coins were previously purchased here. This cohort of investors is currently losing money and will try to offset their losses by selling as soon as the largest memecoin attempts to approach $0.20.
Source: X
DOGE support zones remain weak, and in case of a reset from current values, the decline can only stop at the level of $0.081.
A large cluster involving whale purses has formed here. They will try to prevent a larger retreat.
Source: X
Whale swims can also cause turbulence in the second-largest meme coin, Shiba Inu.
According to Santiment, the number of transactions worth more than $100,000 soared to 406 in early December.
Source: Santiment
On December 6, the daily exchange turnover of the cryptocurrency exceeded 1.06 trillion SHIB. The number of coins in exchange addresses also increased sharply, and whales began selling.
The price of Shiba Inu fell, but whale support strengthened earlier this week, and the digital currency was able to recover its lost ground.
- The MEXC Research team reminds us that during periods of turbulence, large investors, after taking profits, resume buying at comfortable prices.
- They strengthen support at the moment when the coin reaches fundamental values in order to minimize the risks of further decline.
Conclusion
- The Federal Reserve cut its key interest rate by 25 basis points this week, but there have been no significant changes in the cryptocurrency market yet.
- Bitcoin is still trading in a tight range and is unable to break out of the resistance zone that formed between $93,000 and $95,000. The coin requires strong support, and if BTC doesn’t find it in the coming days, bears may try to push the coin below $90,000 again.
- Ether is holding above $3,000, but is also unable to overcome the first key barrier, which is at $3,500-3,600..
- Trader activity will increase if capital flows into the US stock market.
- A rise in the S&P 500 and Nasdaq indices will signal the return of the bulls. In this case, investments will also flow into digital currencies.
- Not only Bitcoin, but also first- and second-tier altcoins will be in the most advantageous position, notes the MEXC Research team.
- During periods of turbulence caused by the influx of capital into risky assets, memecoins and tokens representing artificial intelligence (AI) projects are becoming increasingly popular.
- The lion’s share of capital is usually attracted by the most famous memecoins, Dogecoin and Shiba Inu.
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