Macro update

After two months dominated by macro uncertainty, markets are beginning to show greater tolerance to negative inputs. Familiar concerns around a central bank policy pivot, more mixed macro data, and the sustainability of AI-driven capex in equities are still present, but they are no longer producing the same reflexive risk-off response. That shift has pushed markets into a consolidation phase, choppy at times but notably more stable, with price action largely range-bound over the past two weeks.

In crypto, this environment has translated into a period of digestion rather than trend. BTC has recovered toward ~USD 92k, while total crypto market capitalisation has rebounded to ~USD 3.25tn. The week was largely uneventful until Friday, when a sharp ~USD 4k intraday drawdown in BTC unfolded due to cascading liquidations, ~USD 2bn in just over an hour. The move again highlighted the fragility of the recovery, but importantly, the market absorbed the shock without follow-through selling.

The fading momentum of the recent Nasdaq recovery is evidence of a more selective risk-taking. Rather than broad beta exposure, capital has continued to concentrate into higher-quality assets. In crypto, this has expressed itself as rotation into the majors, with both retail and institutional flows showing a positive skew toward BTC and ETH simultaneously, something not seen in a meaningful way for some time. At the same time, basis remains compressed across the curve, signalling a continued lack of appetite for leveraged directional exposure and a willingness to wait for clearer macro signals. Into year end, implied volatility of options still remains high with positioning showing same lack of direction and traders either expecting $85k or $100k BTC by the end of this month (26/12).

Looking ahead, attention turns to a packed central-bank calendar, with focus firmly on the Federal Reserve decision on Wednesday, followed by the Bank of Japan next week. With CME basis also compressed, we are seeing growing interest in delta-neutral strategies further down the market-cap spectrum, where funding and carry opportunities remain more attractive. This shows the limited appetite to directionally step into altcoins as there’s a preference for majors and selective yield capture as the market works its way to what is shaping up to be a consolidation regime rather than a year-end rally.This points to selective leverage deployment, focused on yield capture rather than outright direction, consistent with a continued consolidation regime rather than an imminent breakout.

Our take:

“The market is consolidating without conviction, with macro events set to determine the next directional break.”

Recent price action reflects a pause rather than a turn. Activity has narrowed into the most liquid parts of the market, while compressed basis and subdued funding highlight limited appetite for directional leverage ahead of policy clarity.

The Federal Reserve decision this week, followed by the Bank of Japan next week, will be key in shaping rate differentials and cross-asset volatility into year-end. In the absence of a decisive macro surprise, crypto is likely to remain range-bound, with volatility driven more by liquidity and positioning than fundamentals. The rise in delta-neutral and carry-oriented strategies, particularly beyond the majors, suggests a market prioritising capital efficiency while waiting for clearer signals, reinforcing consolidation as the dominant regime.