Crypto Market Slides as BTC and ETH Lead Broad Decline; Regulatory Shifts in Focus

I. Crypto Market Overview

Key Takeaways

Macro Environment

The Federal Reserve's recent 25bp rate cut signals a 'higher-for-longer' stance, supporting the US dollar and limiting crypto upside. US CPI inflation cooled to 2.7%, boosting risk asset sentiment and supporting digital assets. Lithuania and Russia are tightening crypto regulations, increasing compliance requirements and market transparency.

Crypto Market

The crypto market declined over the past 12 hours, with BTC down 4.43% to $97,474 and ETH falling 9.27% to $3,144.86, pressured by ETF outflows and weak spot demand. Most altcoins saw sharp losses; MYX dropped 13.58%, FET 12.59%, and SPX 12.38%. MORPHO Labs (MORPHO) outperformed, down only 1.51%, supported by DeFi protocol interest. The DeFi and meme sectors led declines amid risk-off sentiment.

Today's Outlook

Today, the New York Fed accepted $17.251 billion in repo facility submissions, impacting short-term liquidity and market rates. No major token unlocks or protocol launches are scheduled, so market focus remains on macro liquidity and regulatory developments.

Fear and Greed Index

52.00% Annual Percentile

28 Fear

Total Crypto Market Cap

$2.99T

1.32%

Total Market Trading Volume

$86.20B

32.47%

Altcoin Season Index

18.18%

Quarterly Percentile

16 / 100

Total Futures Market Open Interest

2.20B

34.80%

Futures

767.98B

6.21%

Perpetuals

II. Industry Updates

Macro-economic Policies

The Federal Reserve cut its benchmark interest rate by 25 basis points to 3.50%-3.75% on December 10, 2025, signaling a cautious approach to further easing. This "hawkish cut" has led to a "higher-for-longer" rate environment, supporting the US dollar and maintaining elevated yields, which may limit upside for Bitcoin and DEFI liquidity in the near term.

US CPI inflation cooled to 2.7% in November, below expectations, driven by falling oil prices and slowing rents. The moderation in inflation has reinforced market expectations for further monetary easing, providing a supportive backdrop for risk assets, including cryptocurrencies, and potentially boosting BTC and altcoin prices.

Japan's Tokyo CPI dropped to 2.0% in December, and industrial production fell by 2.6% in November, indicating economic moderation. The Bank of Japan is expected to pause further rate hikes, which could weaken the yen and increase capital flows into global risk assets, including crypto markets.

The S&P 500 and Dow Jones reached record highs on December 24, 2025, as investors priced in looser US monetary policy and resilient corporate earnings. This bullish equity sentiment has historically correlated with increased inflows into digital assets, supporting higher DeFi and NFT trading volumes.

The People's Bank of China released its 2025 Financial Stability Report on December 26, emphasizing macro-prudential management and digital finance. The focus on financial innovation and systemic risk monitoring may influence global liquidity conditions and indirectly affect crypto market volatility and capital allocation.

Cryptocurrency Regulatory Trends

Lithuania will enforce strict MiCA licensing from January 1, 2026, treating unlicensed crypto firms as illegal, which may cause short-term market disruption but boost long-term institutional trust.

Russia will launch regulated crypto trading on domestic exchanges from July 1, 2026, introducing retail trading limits and mandatory KYC/AML, signaling a major policy shift and likely increasing market transparency.

Kazakhstan has legalized crypto investments but banned digital asset payments, placing exchanges under central bank oversight to enhance investor protection and market stability.

Sberbank is considering crypto-backed ruble loans, reflecting Russia's evolving regulatory stance and potentially increasing liquidity and integration of digital assets into traditional finance.

Japan's 2026 tax reform proposes separate taxation for virtual currencies, aligning digital asset trading with stocks and investment trusts, which could improve tax clarity and investor confidence.

MORPHO Labs (MORPHO): MORPHO saw a 7.4% 24h price increase, driven by $23.6M in trading volume and renewed DeFi protocol interest, despite a generally flat market.

SPX6900 (SPX): SPX surged 15.4% in 24h with $11.8M volume, ranking in the Top 3 gainers as meme coin momentum and community activity fueled rapid price appreciation.

MYX Finance (MYX): MYX gained 5.0% in 24h, supported by $13.1M trading volume and ongoing protocol upgrades, as its cross-chain derivatives platform attracted new liquidity.

Smart Money Movements

Arthur Hayes withdrew $2.52 million in DeFi tokens from exchanges, with 48.9% in PENDLE, following his Ethereum rebalancing announcement.

The USDC Treasury minted 90 million USDC on Ethereum, highlighting ongoing demand and stablecoin activity on the network.

BlackRock deposited $114.31 million in Bitcoin and Ethereum to Coinbase, transferring 1,044 BTC ($91.9M) and 7,557 ETH ($22.41M).

A Bitcoin whale accumulated holdings, with the number of whale addresses reaching an annual high of 1,440, despite $175 million ETF outflows on December 24.

A major TRUMP token holder transferred 3 million tokens, valued at $14.88 million, back to Binance, marking a $7.81 million decrease from the previous withdrawal value.

Events to Watch

Dec 26 (Fri)

New York Fed accepts $17.251 billion in repo facility submissions, impacting short-term liquidity and market rates.

Dec 30 (Tue)

Slash Vision will unlock $9.25 million in tokens, potentially affecting token supply and market dynamics.

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