Published: 2 December 2025,06:11
Daily Market Analysis New
*China’s renewed multi-agency crackdown triggered a sharp liquidity shock, wiping ~$200B from crypto markets and forcing nearly $1B in liquidations.
*BTC dropped 8% and ETH over 10% amid extreme fear sentiment, while BoJ’s potential December rate hike threatens the JPY carry trade and global risk liquidity.
*Near-term bias stays bearish ahead of the Dec. 10 FOMC, with hopes of a dovish Fed pivot offering the only meaningful catalyst for stabilization.
Digital asset markets faced a severe liquidity crisis in the Asian session, plunging under the weight of renewed regulatory hostility from China. A coordinated statement from multiple Chinese government departments vowing to crack down on virtual currency trading and stablecoin activities triggered a wave of panic selling, erasing approximately $200 billion from the total market capitalization and forcing nearly $1 billion in leveraged position liquidations.
Bitcoin fell as much as 8% before finding a technical bid, while Ethereum declined over 10%, highlighting the intensity of the selling pressure. Although ETF flows showed some stabilization following recent outflows, market sentiment remains deeply negative. The Crypto Fear & Greed Index is entrenched below 20, reflecting persistent “Extreme Fear” and suggesting a sustained recovery in buying interest is unlikely in the immediate term.
Adding to the macro headwinds, Bank of Japan Governor Kazuo Ueda explicitly affirmed the possibility of a December rate hike. Such a move would threaten the decades-long JPY carry trade, a cornerstone of global market liquidity, potentially triggering further capital outflows from speculative assets like cryptocurrencies.
While the market is expected to remain under pressure in the near term, focus is shifting to the December 10 FOMC meeting. Hopes that the Federal Reserve may signal a dovish pivot are providing a fragile narrative for potential stabilization, though any relief is likely to be temporary without a fundamental improvement in the regulatory and liquidity backdrop.
Ethereum has suffered a decisive technical breakdown, facing firm rejection below the critical $3,075 liquidity zone before plummeting over 10%. This sharp decline has completely erased its prior constructive structure, invalidating the previous higher-low pattern and confirming a significant shift in near-term momentum.
The sell-off has brought the cryptocurrency to a crucial technical juncture at the $2,625 level—a previous swing low that now represents the final defense against a more severe correction. A break below this support would signal a continuation of the newly established bearish trend and likely trigger an accelerated decline.
Momentum indicators uniformly reflect this deterioration. The Relative Strength Index (RSI) has entered oversold territory, indicating intense selling pressure, while the Moving Average Convergence Divergence (MACD) has completed a bearish crossover below its zero line. This configuration confirms that momentum has decisively shifted to the downside.
Resistance Levels: 2928.55, 3223.70
Support Levels: 2688.00, 2494.30
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