For years, the crypto market operated under a simple mantra: "When the Fed cuts, Bitcoin pumps." However, the latest insights from Markus Thielen, CEO of 10x Research, suggest that this correlation has fundamentally shifted. As the Federal Reserve navigates a complex economic landscape, the traditional triggers for a crypto rally are being replaced by institutional caution and shifting capital flows.
1. The Fed’s "Hawkish Cut" and Market Uncertainty
Despite the recent rate reduction, the market’s reaction was far from bullish. Bitcoin saw a brief spike followed by a sharp retracement. Jerome Powell’s messaging has become a "mixed bag" of neutral, hawkish, and dovish signals [03:55].
- Internal Division: For the first time in years, the Fed is notably divided. There is no longer a unanimous consensus on the pace of easing.
- The Pause Scenario: The base case for 2025 is shifting from an aggressive cutting cycle to a potential "pause," as the Fed remains wary of persistent inflation and labor market discrepancies [09:58].
2. Institutional Dominance vs. Retail Absence
The current cycle is unique because it is almost entirely driven by institutional capital. Unlike 2017 or 2021, retail "FOMO" (Fear Of Missing Out) is largely missing [10:19].
- Year-End Caution: Institutional players operate on different timelines. As we approach the end of the year, many are locking in profits and reducing risk rather than "YOLOing" into new positions before the holidays [24:21].
- Capital Fatigue: Without a fresh influx of liquidity, the market lacks the "fuel" needed to sustain a move above the psychological $100,000 barrier.
3. The ETF Slowdown and On-Chain Outflows
The narrative of "endless ETF inflows" is hitting a wall.
- Decreasing Momentum: In 2025, Bitcoin ETF inflows have been significantly lower than in the previous year [11:24].
- The Selling Signal: For the first time since August 2023, the market has recorded net on-chain outflows in December [13:10]. This suggests that "real money" is leaving the ecosystem, signaling distribution rather than accumulation.
4. Technical Breakdown: Loss of Momentum
From a technical perspective, Bitcoin has exited the primary "bull channel" that has been in place since early 2023 [10:57]. The inability of the price to reclaim the interior of this channel is a classic sign of trend exhaustion. The market has entered a consolidation phase where the risk of a prolonged sideways move or further correction outweighs the immediate upside.
5. The Death of the Halving Narrative?
Thielen argues that the 4-year cycle is still alive, but its driver has changed. It’s no longer about the Halving (which has become a "rounding error" in terms of supply impact); it’s about the U.S. Political Cycle [18:30].
- Seasonality: Historically, Bitcoin peaks in Q4 following an election, followed by a period of "cooling off" as the new administration takes office and policy uncertainty rises.
6. The "Altseason" Paradox
The classic "Altseason" where every small token pumps is being replaced by a more selective market.
- Supply Inflation: Annual token unlocks totaling tens of billions of dollars create constant sell pressure that retail cannot absorb [28:52].
- The TradFi Substitute: Instead of buying "shitcoins," institutional money is flowing into crypto-linked stocks (MicroStrategy, Coinbase, Miners) and upcoming IPOs (Circle, Kraken). These assets are effectively capturing the "altcoin alpha" in this cycle [30:54].
- Strategic Picks: In this environment, Thielen favors BNB due to its ecosystem utility, yield-generating launchpads, and strong exchange backing [29:28].
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Author: Slava Vasipenok
Founder and CEO of QUASA (quasa.io) - Daily insights on Web3, AI, Crypto, and Freelance. Stay updated on finance, technology trends, and creator tools - with sources and real value.
Innovative entrepreneur with over 20 years of experience in IT, fintech, and blockchain. Specializes in decentralized solutions for freelancing, helping to overcome the barriers of traditional finance, especially in developing regions.
This is not financial or investment advice. Always do your own research (DYOR).
