Original | Odaily Planet Daily (@OdailyChina)
Author | Golem (@web 3_golem)
On the evening of December 15th, Bitcoin experienced another flash crash, plummeting from $89,000 to around $85,000, approaching the low of December 1st ($83,822). Accompanying the sharp drop, the market fear and greed index fell to 21 (extreme fear).
"Be fearful when others are greedy"? The temptation to buy the dip or engage in swing trading is immense right now, but it's also extremely easy to step on a landmine. Monday's flash crash was not an isolated incident. The "three hidden macro risks" planted in December are severely suppressing Bitcoin's upward momentum. A larger storm of decline may have just begun.
Tuesday's Non-Farm Payrolls Night
On Tuesday, December 16th, at 21:30 (UTC+8), the U.S. Department of Labor will release the November Non-Farm Payrolls (NFP) data. Due to the previous U.S. government shutdown, the household survey data for October was not collected, resulting in a blank unemployment rate for October. Consequently, the standalone October NFP data was canceled, but the Labor Department will incorporate the October establishment survey (NFP) data into the November release.
While the NFP data based on the establishment survey remains useful, the lack of contrasting household survey data for October might amplify the contradictions between the non-farm payroll numbers and the unemployment rate, leading to an incomplete and potentially misleading market interpretation. This combined report, missing some key indicators, could increase speculative trading or market volatility, putting pressure on Bitcoin's price. Institutions will also treat this report as an "important but require caution" information.
Citigroup economists also pointed out that the latest employment report to be released on the evening of December 16th might release more conflicting signals. The bank expects October job losses of about 45,000, but an increase of 80,000 jobs in November. They also predict the unemployment rate will rise from 4.4% to 4.52%, while a Reuters survey of economists shows an unemployment rate of 4.4%. The Fed's own quarterly projections indicate a median unemployment rate of about 4.5% by the end of this year.
Coupled with this being the first NFP report since the Fed announced a 25 basis point rate cut on December 10th, market reactions to wages, sector changes, and total employment numbers might be amplified due to expectations for the Fed's January 2026 rate decision.
The NFP report's biggest impact is on market expectations for a Fed rate cut in January 2026. According to CME's "FedWatch Tool," the probability of a 25 basis point rate cut in January 2026 is only 24.4%, while the probability of maintaining the current rate is 75.6%.
Morgan Stanley strategist Michael Wilson analyzed that if tonight's NFP report shows moderate weakness, it could intensify market expectations for the Fed to cut rates again at least in the first quarter of next year.
However, the Financial Times believes that tonight's U.S. NFP report will provide policymakers and investors with a more complete picture of the U.S. labor market, ending months of partial "flying blind." Although the Fed cut rates to a three-year low on December 10th amid serious divisions, the current debate still centers on whether to prioritize fighting high inflation or a weakening labor market.
Therefore, in an already消极 (bearish) market, if the NFP data fails to provide a positive signal again, Bitcoin will likely face another downward crisis.
Friday's Bank of Japan Interest Rate Decision
On Friday, December 19th, the Bank of Japan (BOJ) will announce its interest rate decision. The market widely believes a 25 basis point rate hike (to 0.75%) is a "done deal." According to Polymarket data, the probability of a 25 basis point hike on December 19th has reached 97%, which would bring Japanese interest rates to their highest level in 30 years since 1995.
Investors are closely watching the BOJ's rate hike because the Yen carry trade has injected massive amounts of funds into global financial markets over the past decade, including the crypto market. For over a decade, the BOJ's interest rates have basically remained in an ultra-loose range of "close to 0% or slightly negative," allowing numerous institutions and investors to borrow ultra-low-interest Yen and invest in U.S. Treasuries, U.S. stocks, or Bitcoin, "easily earning" the interest rate differential or risk premium.
But a BOJ rate hike will shatter this illusion. Investors will no longer get "free Yen" to conduct carry trades in global financial markets. Stock and crypto markets will face pressure, while the Yen strengthens, and yields on Japanese 10-year and 30-year government bonds rise successively.
Some macro analysts believe that if the BOJ hikes rates as expected on December 19th, Bitcoin could correct further to the $70,000 level. Analyst AndrewBTC tracked historical data, stating that every BOJ rate hike since 2024 has been accompanied by a Bitcoin price drop of over 20%: approximately 23% in March 2024, ~26% in July 2024, and ~31% in January 2025. If the BOJ hikes rates next week, similar downside risks could reappear.
In fact, the market has been shrouded in the shadow of a BOJ rate hike throughout December. To some extent, the market has almost priced in the possibility of Japan raising rates from 0.5% to 0.75% in December. But the key issue is that a December hike by the BOJ is not a one-off action; it's the start of a new rate hike cycle.
Multiple sources透露 (revealed) that after Friday's hike, Japan could see more rate hikes. These sources stated that Japanese officials believe even after hiking to 0.75%, the BOJ仍未达到 (has still not reached) the neutral interest rate level. Some officials already consider 1% to be below the neutral rate. Informed sources indicated that even if the BOJ updates its neutral rate estimate based on the latest data, the range is not expected to narrow significantly at present. The BOJ's current estimate for the nominal neutral rate range is approximately 1% to 2.5%.
In this scenario, not only will Bitcoin's price be under pressure this week, but it also has the potential to continue trending lower for some time. Crypto investors need to prepare themselves psychologically in advance.
Uncertainty Over Next Fed Chair Nomination Intensifies
Hassett has long been a frontrunner to succeed Powell as the next Fed Chair. Even as the candidate list narrowed to 5 people in early December, Hassett's winning probability on Polymarket remained far ahead (Related reading:Fed "Changing of the Guard" Countdown: 5 Major Candidates Revealed, Who is the Final Winner?). The reason is that Hassett is inherently a "Trump-aligned figure" and agrees with Trump on interest rate cut policy (Trump has consistently advocated for rapid rate cuts).
But on December 13th, the situation began to change. Trump said in an Oval Office interview that day: "Both Kevins (Warsh and Hassett) are excellent, and the other candidates are outstanding too."
Simultaneously, according to informed sources, Trump previously met with Warsh in the Oval Office for 45 minutes, during which he pressured Warsh, asking if he could guarantee support for rate cuts if elected Fed Chair. Trump confirmed this in the interview: "He thinks rates must be cut, everyone I've spoken to thinks so too." Trump said he believes the next Fed Chair should seek his opinion when setting interest rate policy.
After the news broke, the probability of Warsh being nominated as the next Fed Chair on Polymarket rose to 38%, while Hassett's probability dropped from 75% to 50%.
On December 15th, according to informed sources, some senior figures close to Trump are opposing Hassett becoming the next Fed Chair due to concerns that Hassett is too close to the president. Since then, Hassett's advantage on Polymarket has disappeared. As of now, the probability of Warsh being nominated is 47%, while Hassett is at 41%, slightly behind Warsh.
This is not good news for crypto investors. Crypto investors, of course, are not interested in U.S. political struggles, but rather because Warsh is not part of the "rate cut camp." Warsh has long been considered a "hawk," with policies leaning towards tightening interest rates and combating inflation, and advocating for reducing the central bank's balance sheet. If he takes office, it would clearly suppress the crypto market from a macro perspective.
The Bitcoin plunge on the evening of December 15th was also influenced, in the short term, by the sentiment surrounding Warsh's potential nomination. But if Trump ultimately confirms Warsh's nomination by the end of December, then the Christmas rally anticipated by crypto investors might also fail to materialize.
