My thoughts on the current state of the market

As December 2025 winds down, crypto markets are sitting in an uneasy position. Prices remain elevated, Bitcoin and Ethereum are holding key levels, and equities are still hovering near all-time highs. Yet beneath the surface, fear hasn’t gone away—in fact, it’s quietly building.

This is not a crash environment. But it’s also not the kind of market where blind optimism is rewarded. Macro risks are rising, labor data is weakening, and crypto remains stuck in consolidation rather than trend. In this update, we’ll break down what’s happening, why caution is warranted, and what confirmation actually looks like from here.

From a long-term perspective, the market appears to be in a late-cycle environment.

Economic cycle analysis suggests we are closer to a peak than a fresh beginning. This bull market didn’t start recently—it’s been building for years.

Historically, Bitcoin has often peaked in Q4 of halving years, as seen in 2013, 2017, and 2021. If that pattern repeats, Q4 2025 may already represent the cyclical high.

That doesn’t guarantee immediate downside—but it does argue for caution.

From a headline perspective, things look fine. The S&P 500 and Nasdaq are trading just below all-time highs, and the Federal Reserve has already delivered a 25-basis-point rate cut. Normally, that combination would fuel a broad “risk-on” mood.

Instead, sentiment remains cautious.

The reason is simple: expectations for additional rate cuts have faded fast. The probability of another cut in January 2026 has dropped below 25%. Markets are realizing that the Fed may not be ready to pivot aggressively, even as economic cracks begin to show.

Several macro risk factors are adding to the unease:

• Bank of Japan Rate Hike Risk:Markets are pricing a high probability that the Bank of Japan raises rates from 0.5% to 0.75%—the highest level in three decades. That may seem small, but it carries major implications for global liquidity.

  A stronger yen increases the risk of a yen carry trade unwind, which historically leads to rapid deleveraging across equities and crypto, similar to what we saw in mid-2024.

• VIX Term Structure Warning:The VIX term structure has dipped below 0.79, a condition that has appeared only a handful of times in recent years. Each occurrence was followed by a 10% or larger correction in U.S. equities.

• Triple Witching Volatility:With stock options, index options, and futures expiring simultaneously, volatility tends to spike—especially in fragile markets.

Add to that growing concern about an AI-driven equity bubble and extreme concentration in mega-cap tech. The top seven stocks now account for more than a third of the S&P 500, making diversification increasingly difficult. Unsurprisingly, many investors are hesitant to add fresh long exposure at these levels.

While inflation has cooled, the labor market is starting to soften—and this may be the most important macro signal to watch.

Unemployment has climbed to 4.6%, continuing a steady uptrend that began earlier this year. Job openings are declining, quit rates are falling, and hiring momentum is slowing. These are classic late-cycle signs.

Historically, unemployment doesn’t spike overnight. It rises gradually, then accelerates as layoffs spread and corporate confidence weakens. Once that acceleration begins, economic slowdowns tend to deepen rather than resolve quickly.

At the same time, monetary policy remains restrictive. The federal funds rate is still above short-term Treasury yields, a setup that has historically pressured risk assets. In previous cycles, meaningful recoveries didn’t occur until the Fed cut rates decisively below short-term yields.

Bitcoin often reacts in phases:

• Initial weakness as liquidity tightens

• A relief bounce that feels convincing

• A retest—or undercut—of prior lows before a durable recovery

This suggests a possible local bottom between late December and early January, followed by a rebound that remains within a broader consolidation. A true upside breakout likely requires stronger and more sustained rate cuts—possibly not until mid-to-late 2026.

Bitcoin remains technically neutral.

• Floor -offs were aggressively bought here, confirming strong demand.

• Ceiling Resistance: ~$93,000–$94,500Price briefly moved above this zone but failed to hold a weekly close, signaling rejection

• SHORT TERM RANGE ~ $88,000 - $91,000 K

  .

• Trend & Momentum:Weekly momentum indicators are fading, and volatility remains stable but uninspiring.

For now, Bitcoin is trapped between $81K and $93K. Bulls need a clean weekly close above resistance to confirm trend continuation. Until that happens, patience matters more than prediction.

in lockst showing leadership.

• Resistance: ~$3,017 on a weekly close basis

• Support: ~$2,819, which has held during recent pullbacks

• Momentum: Weak, with indicators still below neutral

• Volume: Low, confirming indecision

In strong bull phases, Ethereum often leads rotations into riskier assets. Right now, it’s not doing that—and that matters.

Zooming out to the broader altcoin market, conditions remain challenging.

• ETH/BTC Continues to build a lower base, but each time bitcoin corrects, altcoin liquidity moves back to bitcoin. A pattern that historically weighs on the entire altcoin sector.

• TOTAL3 Market Cap:The total market cap excluding Bitcoin and Ethereum has failed multiple times at key resistance levels. Despite short-term bounces, there has been no confirmed breakout.

This combinatggests that fresh capi not meaningfully rotinto altcoins. Until Ethereum stens relative to Bitcoin and TOTAL3 breaks out decisively, altcoin rallies are likely to remain short-lived.

From a long-term perspective, the market appears to be in a late-cycle environment.

Economic cycle analysis suggests we are closer to a peak than a fresh beginning. This bull market didn’t start recently—it’s been building for years.

Historically, Bitcoin has often peaked in Q4 of halving years, as seen in 2013, 2017, and 2021. If that pattern repeats, Q4 2025 may already represent the cyclical high.

That doesn’t guarantee immediate downside—but it does argue for caution.

This is not a bearish call—it’s a disciplined one.

• Macro risks are rising

• Market breadth is weak

• Bitcoin and Ethereum remain in consolidation and in a macro downtrend

• Altcoins lack leadership and liquidity (right now)

• We've consolidated many of our positions

• Labor data is deteriorating faster than policy is easing

As we navigate through these uncertain times, it’s essential to remain vigilant and informed. While the market may present opportunities, a disciplined approach is key. The best strategy is to stay engaged, but allow price action to guide your decisions. Tune out the noise and focus on clear technical confirmations before increasing your risk. Remember, in late-cycle markets, patience is not just a virtue; it’s a form of protection.

Join our community for real-time insights and updates! Connect with us on Telegram and take advantage of our free course to enhance your understanding of the market. Your financial journey matters, and we’re here to support you every step of the way!

📢 Telegram: https://t.me/DADSDefiSpace

Free Course: https://www.dadsdefispace.org/challenge

👨‍🏫 X: @thecaptain1013

💬 Farcaster: https://farcaster.xyz/thecaptain1013

📲 Base App Profile: https://base.app/profile/dadsdefispace

WEB3 Newsletter (Writer Coin soon): https://paragraph.com/@daddefispace

TOKEN: $DADSDEFISPACE

🔗 Contract: 0x11c77e7a39c80e00f1c15bfb5f394e7b7e9a50c6

🌐 Trade on Zora: https://zora.co/dadsdefispace

🌐 Trade on AERODROME: https://aero.drome.eth.limo/swap?from=0x833589fcd6edb6e08f4c7c32d4f71b54bda02913&to=0x11c77e7a39c80e00f1c15bfb5f394e7b7e9a50c6&chain0=8453&chain1=8453

📊 DADSDEFISPACE Chart: https://dexscreener.com/base/0x455276887092f85e76b0fcd9bd172fb7167ee66370a8a6

Financial Disclaimer: This content is for informational purposes only and should not be considered financial advice. Please conduct your own research and consult with a financial advisor before making any investment decisions.

My thoughts on the current state of the market

As December 2025 winds down, crypto markets are sitting in an uneasy position. Prices remain elevated, Bitcoin and Ethereum are holding key levels, and equities are still hovering near all-time highs. Yet beneath the surface, fear hasn’t gone away—in fact, it’s quietly building.

This is not a crash environment. But it’s also not the kind of market where blind optimism is rewarded. Macro risks are rising, labor data is weakening, and crypto remains stuck in consolidation rather than trend. In this update, we’ll break down what’s happening, why caution is warranted, and what confirmation actually looks like from here.

From a long-term perspective, the market appears to be in a late-cycle environment.

Economic cycle analysis suggests we are closer to a peak than a fresh beginning. This bull market didn’t start recently—it’s been building for years.

Historically, Bitcoin has often peaked in Q4 of halving years, as seen in 2013, 2017, and 2021. If that pattern repeats, Q4 2025 may already represent the cyclical high.

That doesn’t guarantee immediate downside—but it does argue for caution.

From a headline perspective, things look fine. The S&P 500 and Nasdaq are trading just below all-time highs, and the Federal Reserve has already delivered a 25-basis-point rate cut. Normally, that combination would fuel a broad “risk-on” mood.

Instead, sentiment remains cautious.

The reason is simple: expectations for additional rate cuts have faded fast. The probability of another cut in January 2026 has dropped below 25%. Markets are realizing that the Fed may not be ready to pivot aggressively, even as economic cracks begin to show.

Several macro risk factors are adding to the unease:

• Bank of Japan Rate Hike Risk:Markets are pricing a high probability that the Bank of Japan raises rates from 0.5% to 0.75%—the highest level in three decades. That may seem small, but it carries major implications for global liquidity.

  A stronger yen increases the risk of a yen carry trade unwind, which historically leads to rapid deleveraging across equities and crypto, similar to what we saw in mid-2024.

• VIX Term Structure Warning:The VIX term structure has dipped below 0.79, a condition that has appeared only a handful of times in recent years. Each occurrence was followed by a 10% or larger correction in U.S. equities.

• Triple Witching Volatility:With stock options, index options, and futures expiring simultaneously, volatility tends to spike—especially in fragile markets.

Add to that growing concern about an AI-driven equity bubble and extreme concentration in mega-cap tech. The top seven stocks now account for more than a third of the S&P 500, making diversification increasingly difficult. Unsurprisingly, many investors are hesitant to add fresh long exposure at these levels.

While inflation has cooled, the labor market is starting to soften—and this may be the most important macro signal to watch.

Unemployment has climbed to 4.6%, continuing a steady uptrend that began earlier this year. Job openings are declining, quit rates are falling, and hiring momentum is slowing. These are classic late-cycle signs.

Historically, unemployment doesn’t spike overnight. It rises gradually, then accelerates as layoffs spread and corporate confidence weakens. Once that acceleration begins, economic slowdowns tend to deepen rather than resolve quickly.

At the same time, monetary policy remains restrictive. The federal funds rate is still above short-term Treasury yields, a setup that has historically pressured risk assets. In previous cycles, meaningful recoveries didn’t occur until the Fed cut rates decisively below short-term yields.

Bitcoin often reacts in phases:

• Initial weakness as liquidity tightens

• A relief bounce that feels convincing

• A retest—or undercut—of prior lows before a durable recovery

This suggests a possible local bottom between late December and early January, followed by a rebound that remains within a broader consolidation. A true upside breakout likely requires stronger and more sustained rate cuts—possibly not until mid-to-late 2026.

Bitcoin remains technically neutral.

• Floor -offs were aggressively bought here, confirming strong demand.

• Ceiling Resistance: ~$93,000–$94,500Price briefly moved above this zone but failed to hold a weekly close, signaling rejection

• SHORT TERM RANGE ~ $88,000 - $91,000 K

  .

• Trend & Momentum:Weekly momentum indicators are fading, and volatility remains stable but uninspiring.

For now, Bitcoin is trapped between $81K and $93K. Bulls need a clean weekly close above resistance to confirm trend continuation. Until that happens, patience matters more than prediction.

in lockst showing leadership.

• Resistance: ~$3,017 on a weekly close basis

• Support: ~$2,819, which has held during recent pullbacks

• Momentum: Weak, with indicators still below neutral

• Volume: Low, confirming indecision

In strong bull phases, Ethereum often leads rotations into riskier assets. Right now, it’s not doing that—and that matters.

Zooming out to the broader altcoin market, conditions remain challenging.

• ETH/BTC Continues to build a lower base, but each time bitcoin corrects, altcoin liquidity moves back to bitcoin. A pattern that historically weighs on the entire altcoin sector.

• TOTAL3 Market Cap:The total market cap excluding Bitcoin and Ethereum has failed multiple times at key resistance levels. Despite short-term bounces, there has been no confirmed breakout.

This combinatggests that fresh capi not meaningfully rotinto altcoins. Until Ethereum stens relative to Bitcoin and TOTAL3 breaks out decisively, altcoin rallies are likely to remain short-lived.

From a long-term perspective, the market appears to be in a late-cycle environment.

Economic cycle analysis suggests we are closer to a peak than a fresh beginning. This bull market didn’t start recently—it’s been building for years.

Historically, Bitcoin has often peaked in Q4 of halving years, as seen in 2013, 2017, and 2021. If that pattern repeats, Q4 2025 may already represent the cyclical high.

That doesn’t guarantee immediate downside—but it does argue for caution.

This is not a bearish call—it’s a disciplined one.

• Macro risks are rising

• Market breadth is weak

• Bitcoin and Ethereum remain in consolidation and in a macro downtrend

• Altcoins lack leadership and liquidity (right now)

• We've consolidated many of our positions

• Labor data is deteriorating faster than policy is easing

As we navigate through these uncertain times, it’s essential to remain vigilant and informed. While the market may present opportunities, a disciplined approach is key. The best strategy is to stay engaged, but allow price action to guide your decisions. Tune out the noise and focus on clear technical confirmations before increasing your risk. Remember, in late-cycle markets, patience is not just a virtue; it’s a form of protection.

Join our community for real-time insights and updates! Connect with us on Telegram and take advantage of our free course to enhance your understanding of the market. Your financial journey matters, and we’re here to support you every step of the way!

📢 Telegram: https://t.me/DADSDefiSpace

Free Course: https://www.dadsdefispace.org/challenge

👨‍🏫 X: @thecaptain1013

💬 Farcaster: https://farcaster.xyz/thecaptain1013

📲 Base App Profile: https://base.app/profile/dadsdefispace

WEB3 Newsletter (Writer Coin soon): https://paragraph.com/@daddefispace

TOKEN: $DADSDEFISPACE

🔗 Contract: 0x11c77e7a39c80e00f1c15bfb5f394e7b7e9a50c6

🌐 Trade on Zora: https://zora.co/dadsdefispace

🌐 Trade on AERODROME: https://aero.drome.eth.limo/swap?from=0x833589fcd6edb6e08f4c7c32d4f71b54bda02913&to=0x11c77e7a39c80e00f1c15bfb5f394e7b7e9a50c6&chain0=8453&chain1=8453

📊 DADSDEFISPACE Chart: https://dexscreener.com/base/0x455276887092f85e76b0fcd9bd172fb7167ee66370a8a6

Financial Disclaimer: This content is for informational purposes only and should not be considered financial advice. Please conduct your own research and consult with a financial advisor before making any investment decisions.