Weekly Crypto Fundamental Outlook: Is the Return of Confidence Not Enough?

Cryptocurrencies experienced a temporary boost in confidence this week, driven by expectations of interest rate cuts from the Federal Reserve. However, as the trading week came to an end, a sense of indecision resurfaced, reflected in declining activity across key network metrics for assets such as BTC, which could lead to a more persistent period of neutrality in the sessions ahead.

Risk Appetite Fails to Hold

During the week, a key event initially supported demand for risk assets such as cryptocurrencies: the release of the preliminary ADP Employment Change report in the United States. A gain of 5,000 new jobs had been expected, but the actual data surprised with a decline of -32,000, strengthening expectations that the Federal Reserve will end the year with lower interest rates. According to CME Group, there is now an 87.2% probability of a 0.25% rate cut in the upcoming December 10 decision, which in theory opens the door to more liquidity for investment and consumption—an environment that typically benefits risk assets like crypto.

Source: CMEGROUP

However, this initial optimism was not enough to sustain demand in the cryptocurrency market. Bitcoin’s Open Interest—which measures the total number of open positions in the futures market—fell back toward the 28-billion range, accompanied by a decline in price. This suggests that long positions have exited the market, allowing selling pressure to regain dominance among institutional participants.

Source: Cryptoquant

Similarly, the number of active BTC addresses has remained stable at 826.8k, indicating that retail activity has not increased meaningfully. Despite the early-week improvement in sentiment, this optimism did not translate into sustained BTC demand.

Source: Cryptoquant

Taken together, these indicators show that expectations of lower U.S. rates have not been sufficient to maintain strong buying pressure in the crypto market. If network activity continues to decline, the market may enter a phase of persistent indecision, at least until the Federal Reserve confirms its policy stance for 2026 in the December 10 decision.

 

Bitcoin Compared to Other Markets

Recent Bitcoin movements have shown a moderate positive correlation with the SPX index, with a coefficient near 0.5, suggesting that BTC is currently behaving similarly to other risk assets. This reflects Bitcoin’s sensitivity to recent macroeconomic developments and its alignment with the broader positive sentiment in the equity market. Correlation coefficients may change over time.

In contrast, correlation between BTC and gold remains negative, approaching -0.5, indicating that Bitcoin is not acting as a safe-haven asset, unlike in previous months. This implies that any deterioration in confidence across risk markets could also impact major cryptocurrencies.

Source: Data – TVC, StoneX, Tradingview

Thus, as long as Bitcoin continues to behave like a traditional risk asset, and if risk appetite fails to recover in the short term, the broader crypto market could  face a period of persistent indecision.

 

Confidence Recovers Only Slightly

The Crypto Fear & Greed Index has shown a slow recovery from the “extreme fear” zone, rising toward 25 points, yet it remains within the broader “fear” territory. This indicates that although confidence has improved slightly, the crypto market is still operating under negative sentiment.

Source: Coinmarketcap

As long as the index fails to climb at least into the “neutral” zone, it will be difficult for a sustained bullish bias to take hold. In this environment, weakness across traditional risk assets could continue to reinforce neutrality and indecision in the crypto market over the next sessions.

 

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him at: @julianpineda25