Bitcoin Underperforms as Crypto Market Slumps on Falling December Rate-Cut Bets and Macro Risk-Off Sentiment

Wintermute’s latest briefing indicates markets absorbed a sharp shift in rate-cut expectations, with probability sliding from roughly 70% to 42% in just one week as a macro data vacuum amplified volatility. Powell’s cautious language on a December cut kept traders debating FOMC divergence, leaving a clear consensus on a rate cut still elusive and risk assets retreating, with the crypto market bearing the brunt.

Across asset classes, digital assets underperformed this cycle, a pattern that has persisted since early summer. Notably, BTC and ETH trailed the broader altcoin cohort, even as certain niche segments—such as privacy-focused tokens and fee-switchers—show pockets of relative resilience amid the downturn.

The pullback was magnified by shifts in whale positions, with fourth-quarter selling activity front-loaded as traders anticipate a potentially dulled 2025 per cycle theory. Yet the macro backdrop remains constructive: ongoing easing, the close of quantitative tightening, and potential Q1 liquidity support. The key signal missing is a stabilization of the flagship asset; absent a Bitcoin momentum return, market breadth may stay constrained and the recovery narrative could remain transient.