The new week begins with a more constructive tone across the crypto market after last week ended slightly in the red, despite two major industry developments: Ethereum’s Fusaka upgrade and the launch of Chainlink’s ETF.
Losses were limited, but the broader trend remained cautious as sentiment struggled to break out of persistent fear territory. Today, however, major cryptocurrencies are moving higher, setting a steadier backdrop ahead of a closely watched Federal Reserve decision on Wednesday.
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Market Moves
Bitcoin is up 2% this morning, pushing back above $90,000 after spending much of last week fluctuating below that threshold. Ethereum has gained 3%, trading above $3,100.
XRP and Solana are also up 2%, while BNB has added 1% in early trading. These gains lifted the global crypto market capitalization by 1.6% to $3.11T, extending the modest recovery that began during the weekend.
Despite the improvement, market conditions remain fragile. Most assets are still well below levels seen in mid-November, and price movements continue to react quickly to macro expectations. The next major catalyst arrives midweek, when the Federal Reserve announces its interest rate decision. Futures markets currently assign a strong probability to a 0.25% cut, after weeks of uncertainty and shifting expectations throughout November.
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Sentiment Indicators
The Fear and Greed Index stands at 20, firmly in extreme fear. Since early November, the index has not reached neutral and has not moved above 30 at any point. Coinmarketcap’s equivalent sentiment gauge also shows fear at 24, reinforcing the overall lack of confidence across the market.
This prolonged stretch of low sentiment has accompanied the broader correction across digital assets over the past several weeks. Although prices have been stabilizing, sentiment recovery has been slower, suggesting that traders remain cautious ahead of macro risk events.
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Market Context
Expectations surrounding monetary policy continue to guide broader risk appetite. Early in November, traders were divided on whether the Federal Reserve would cut rates in December, especially after Chair Jerome Powell stated that a cut was “not a foregone conclusion”. At one point, futures briefly leaned toward the Fed holding rates steady. That outlook shifted again as economic indicators showed cooling in the labor market without a corresponding rise in inflation, helping to reinforce expectations that there is room for a 0.25% move.
Liquidity conditions have also been changing. Quantitative tightening has ended, and adjustments in Treasury and reverse repo balances have introduced additional liquidity into the financial system. These factors have supported risk assets, including crypto, although the recent selloffs show that sentiment remains sensitive to macro communication and short-term flows.
US stock futures opened the week with slight gains as traders look ahead to Wednesday’s rate announcement, Powell’s press conference, and a series of delayed economic releases. Equity markets posted back-to-back weekly gains before entering December, driven in part by expectations that policy will turn more accommodative heading into 2026.
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Outlook
The focus this week rests squarely on the Federal Reserve’s decision and the messaging that follows. Markets are pricing in a 0.25% cut with high confidence, but guidance on future policy steps may determine whether the current stabilization in crypto extends.
For now, the market enters the week in green but remains positioned cautiously, with sentiment still at extreme fear despite today’s gains. Price action over the next several days is likely to closely track macro signals as traders evaluate the potential impact on liquidity and risk appetite heading into the final weeks of the year.
