The crypto market takes a breather as BTC rebounds back to $91,000. Can this trend continue?

Shaw, Jinse Finance

In the early hours of November 27th, the cryptocurrency market saw a turnaround after several weeks of sluggishness. Bitcoin rebounded rapidly, briefly breaking through $91,500 and touching $91,950, a 24-hour increase of over 4%; Ethereum returned to the $3,000 mark, briefly touching $3,071.37, a 24-hour increase of over 3.5%. Data shows that in the past 24 hours, a total of $323 million in positions were liquidated across the network, including $77.0831 million in long positions and $246 million in short positions.

Recently, the market direction has shifted. The combined effect of factors such as the macroeconomic environment and expectations of a Fed rate cut has temporarily halted the cryptocurrency market's decline.

Can this rise indicate that the market has bottomed out and rebounded, and can it continue?

I. Crypto Market Rebounds, Panic Eased Slightly Early this morning, the crypto market saw a turnaround after several weeks of slump. Bitcoin rebounded rapidly, briefly breaking through $91,500 and touching $91,950, a 24-hour increase of over 4%; Ethereum returned to the $3,000 mark, briefly touching $3,071.37, a 24-hour increase of over 3.5%. Coinglass data shows that in the past 24 hours, a total of $323 million in positions were liquidated across the network, including $77.0831 million in long positions, $246 million in short positions, $133 million in BTC liquidations, $52.3725 million in ETH liquidations, and $16.2007 million in SOL liquidations. In the past 24 hours, a total of 112,363 people across the network were liquidated, with the largest single liquidation occurring in Hyperliquid-BTC-USD, valued at $14,578,700. The recent significant rebound in cryptocurrency prices, after a prolonged slump, has provided some respite for the market and alleviated some of the deepening panic. Factors such as a positive macroeconomic environment, rising expectations of a Federal Reserve interest rate cut, and ETF inflows are likely the main drivers behind this cryptocurrency rebound. II. Improved Macroeconomic Data Stimulates Major Asset Markets Latest data shows that the number of initial jobless claims in the US last week was 216,000, compared to an estimated 225,000 and a previous reading of 220,000, marking the lowest level since mid-April and significantly boosting investor confidence. Although the PPI report showed a slight increase in wholesale prices due to rising energy and food costs, the core PPI increase (2.6%) was the smallest increase since July 2024. Recent US macroeconomic data has been relatively positive, and retail stocks related to Thanksgiving holiday spending were also boosted. Optimism supported the continued strength of technology and small-cap stocks. The S&P 500 and Nasdaq closed at two-week highs. Dell closed up nearly 6%. Nvidia's supply chain rebounded, with Nvidia rising over 1% and Coreweave rising over 4%; Google fell back 1%. Improved macroeconomic data boosted investor confidence in the market, and the rise in major assets such as US stocks also contributed to the rebound in the crypto market. III. The Fed's Shift in Stance, Rate Cut Expectations Rise Again The Fed's latest Beige Book shows that US economic activity has remained largely unchanged in recent weeks, with overall consumer spending declining further except for high-end consumers. The Beige Book points out that the US job market has weakened slightly, and price levels have remained moderately high. The Fed stated in the report: "The overall economic outlook remains stable, with some surveyed businesses warning of the risk of an economic slowdown in the coming months, while the manufacturing sector expressed cautious optimism." Due to the disruption of key economic data collection caused by the longest government shutdown in US history, which lasted until November 12, field surveys reflecting the actual situation of businesses and consumers have received considerable attention in recent months. Federal Reserve officials will not have access to complete labor market and inflation data for October and November before their December policy meeting. Following the report's release, JPMorgan economists changed their forecasts, now believing the Fed will begin cutting interest rates in December, reversing their assessment a week earlier that policymakers would postpone rate cuts until January. The JPMorgan research team stated that statements from several key Fed officials (particularly New York Fed President Williams) supporting recent rate cuts prompted them to reassess the situation. JPMorgan now expects the Fed to implement two 25-basis-point rate cuts, one in December and one in January. CME FedWatch data shows an 84.9% probability of a 25-basis-point rate cut in December and a 15.1% probability of keeping rates unchanged. The probability of the Federal Reserve cutting interest rates by a cumulative 25 basis points by January is 66.4%, the probability of keeping rates unchanged is 11.1%, and the probability of a cumulative 50 basis point rate cut is 22.6%. Furthermore, Polymarket data shows that "the probability of a 25 basis point rate cut by the Fed in December has risen to 83%", while the probability of keeping rates unchanged has fallen to 16%, and the trading volume for this prediction event has reached $173 million. Recent reports from the Federal Reserve and statements from several officials have fueled market expectations for a December rate cut, and investors have regained confidence in the return of liquidity to risk assets. IV. ETF Fund Flows Show Some Recovery, New Crypto ETFs Launched Trader T monitoring data shows that the US spot Bitcoin ETF has seen net inflows for two consecutive days, totaling $149 million; the US spot Ethereum ETF has also seen net inflows for two consecutive days, totaling $139 million. In addition, several institutions have launched ETFs related to other mainstream cryptocurrencies. Grayscale has launched XRP and Dogecoin ETFs. Bitwise officially launched the Bitwise Dogecoin ETF on the New York Stock Exchange, ticker symbol BWOW. Franklin Templeton, VanEck, and others have also applied to launch new ETF products. The temporary recovery in ETF fund inflows, along with the launch of related crypto asset ETFs by other institutions, indicates that institutional investors have not completely withdrawn their funds and will likely re-enter the market after readjustment. V. Market Analysis and Interpretation Can this recent rebound in cryptocurrencies indicate that the market has bottomed out, whether the deep correction has come to an end, and whether the upward trend can continue? Let's take a look at some recent market analyses and interpretations. 1. 4E Lab observations indicate that the return of ancient whales, the relaxation of ETF derivatives, the trend towards structured regulation, and continued institutional buying together constitute a mildly bullish signal. Bitcoin's "expectation gap" has shifted from extreme optimism to rational optimism, while Ethereum is regaining attention from deep-chain players. With simultaneous improvements in funding and the regulatory environment, the market has entered a phase of resonance from three factors: "warm policy, stable funding, and rising sentiment." 2. Matrixport released a chart stating, "Based on the implied pricing of federal funds futures, the market expects the probability of a Fed rate cut on December 10th to rise to 84%, while the probability of maintaining the rate unchanged in January has also increased to 65%. Under such interest rate expectations, even if a rate cut occurs in December, the overall easing of monetary policy will still be limited. Compared to Bitcoin, gold is more correlated with the US fiscal deficit and the pace of Treasury bond issuance, and is more direct in hedging against fiscal expansion and rate cut expectations. Bitcoin relies more on real incremental funds entering the market, and the current incremental liquidity has not yet been significantly released. Under this environment, the divergence between gold and Bitcoin is likely to continue in the short term." 3. Galaxy Digital founder Mike Novogratz stated that he still firmly believes Bitcoin can return to $100,000 by the end of the year, but there will be significant selling pressure at that time. This is because the psychological impact of the "10/11" crash on the market is medium-term. Meanwhile, Novogratz stated that with the clarification of crypto policies and the entry of traditional financial giants, the market will become deeply differentiated in the future, with tokens that can provide value being favored. 4. Bitwise advisor Jeff Park believes that Bitcoin's previous four-year halving cycle has ended and has now been replaced by a two-year cycle, driven by the economic behavior of institutional fund managers and ETF fund flows. 5. CryptoQuant analyst Abramchart pointed out that the market has just completed a deep "leverage cleansing," with total open interest plummeting from $45 billion to $28 billion, marking the largest drop in this cycle. This is not a bear market signal, but rather a major market reshuffle, clearing out excessively inflated speculative positions and accumulating healthier momentum for subsequent rises. 6. BitMine Chairman Tom Lee believes that Bitcoin could potentially return to its October all-time high of $125,100 by the end of the year. In an interview on Wednesday, Lee stated, "I think it's still very possible for Bitcoin to reach over $100,000 by the end of the year, and perhaps even set a new high." 7. Windemute trading strategist Jasper De Maere points out that the options market shows traders generally expect Bitcoin to fluctuate between $85,000 and $90,000, betting that the market will maintain the status quo rather than experience a breakout. Whether this rebound can truly transform into a sustainable upward trend ultimately depends on whether macroeconomic policies and funding can provide sustained and strong support. 8. Delphi Digital analysts published an analysis of the current bullish and bearish structures forming for BTC. The bullish scenario views the current price action as an ABC correction, requiring a decisive break above $103,500 for confirmation. The bearish scenario sees the current rally forming a lower high anywhere below $103,500, triggering the next wave of decline to complete a full 5-wave downward pulse before a larger, sustained rally.

9. Yi Lihua, founder of LiquidCapital (formerly LDCapital), stated: ETH has returned to $3000, the extreme panic has subsided, and he remains optimistic about the subsequent market trend.