The crypto market entered December with strong upward momentum, with Bitcoin climbing towards $94,000 and Ethereum nearing $3,250 by late last week, according to a research note from Laser Digital.

The rally was fuelled by two key catalysts: Strategy’s purchase of roughly $960 million worth of BTC and anticipation around the Fusaka upgrade scheduled for December 3.

However, as those factors passed, bullish sentiment evaporated. Prices quickly reversed during Friday’s U.S. trading session, leading to aggressive selling. A small rebound emerged over the weekend, but sentiment failed to sustain into Monday—a pattern that Laser Digital notes has been “typical behavior of the crypto market for the past few months.”

Bond Yields Hit Multi-Decade Highs as Policy Expectations Shift

Macro conditions added pressure across risk assets. Bond markets sold off across major economies, driven initially by Japan. The JGB 10-year yield breached 1.90%, a record level over the past 30 years.

Laser Digital says that the move followed growing odds of a December rate hike by the Bank of Japan, coupled with concerns around increased issuance stemming from a larger-than-expected FY25 supplementary budget and the expected FY26 budget.

Meanwhile, in the U.S., the 10-year Treasury climbed above 4.10%, with markets positioning ahead of the Federal Reserve’s policy meeting. Expectations for a “hawkish cut” this week—a reduction accompanied by firm forward guidance—weighed on rate sentiment and risk appetite broadly.

Market Split Between Equities and Crypto

Gracy Chen, CEO at the universal exchange Bitget, said investors are behaving as if the Fed’s rate decision has already been decided. “According to CME Group’s FedWatch, Fed funds futures bet on almost a 90% chance of a 25 bp cut, which makes sense, especially given inflation cooling and soft macro data. Interestingly, just a couple of weeks ago, the chance was below 40%.”

She notes a divergence in risk sentiment: “The S&P 500 is up almost 17% this year and trades only about 4% below its October peak. Yet U.S. equity funds had $3.5 billion in outflows last week, while global funds added $7.9 billion… Crypto, sadly, is much weaker… A rate cut could make BTC rise back toward $94,000–$96,000. By contrast, a cautious move could send it into the $80K range again.”

Volatility Builds Ahead of Central Bank-Heavy Week

Laser Digital notes that options markets are pricing extra volatility ahead of the FOMC decision. The trading desk expects “price action to be choppy this week and next,” citing a dense calendar that includes the Fed on December 10, the BOJ on December 19, and two major labor reports in between.

Market focus is centred on the Fed’s updated Summary of Economic Projections (SEP) dot plot and the potential revision to the terminal rate path, both of which could reshape positioning into year-end.

Volume Cools, but Event Risk Premium Remains

Crypto volatility has eased back from recent peaks, though markets continue to price event risk meaningfully. BTC volumes are trading around the 45-vol handle and ETH around 70-vol, with 11th December event volatility marked at 56v for BTC and 75v for ETH.

Laser Digital notes that spot-vol correlation remains negative—a trend that has continued to materialize. With macro forces dominating and catalysts fading, markets appear braced for turbulence as central banks take centre stage.

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