🌟 [⚡ DEC 01, 2025 – 12-HR CRYPTO/MACRO RECAP ⚡] 1️⃣ **Bitcoin crashes into bear market**: BTC hits $86,760.82 (-4.40% 24h) as $4B+ liquidations trigger panic. Fear & Greed Index plummets to 24 – Extreme Fear. Altcoins mirror BTC: ETH (-5.11%), SOL (-6.43%), DOGE (-6.94%). Total crypto cap falls to $3.04T (-4.28%). 2️⃣ **ETF flows split BTC/ETH**: BTC ETFs net $+21.1M inflow (IBIT: $+42.8M, FBTC: -$33.3M). ETH ETFs crush bulls with $+60.8M net inflow (ETHA: $+50.2M, ETH: $+6.3M). Despite outflows, BTC ETFs’ resilience hints at long-term positioning. 3️⃣ **Tether under siege**: Amid Bitcoin’s drop, Tether CEO Paolo Ardoino denies insolvency rumors, claiming “substantial equity buffer.” USDT’s dominance in liquidations ($5.4B daily volume) amplifies fears of reserve instability. 4️⃣ **China cracks down on stablecoins**: PBoC reiterates crypto/stablecoin bans as speculation grows. USDT faces scrutiny amid concerns over gold-backed reserve claims. Regulatory pressure could disrupt $100B+ cross-border payments. 5️⃣ **Macro triggers liquidity crunch**: Fed halts QT as overnight repo rates spike. Treasury General Account rebuilds drain $150B from system cash. Crypto margin calls accelerate as banks tighten lending.

[🔍 DEEP DIVE INTO DECEMBER’S MELTDOWN 🔍] • **BTC’s bear trap**: Bitcoin’s 4.4% drop to $86,760 underscores structural fragility. Despite ETF inflows, retail panic and institutional hedging (45% of liquidations at 10x leverage) are driving wedges in the market. Fear & Greed Index at 24 is a red flag – this isn’t just a correction, it’s a liquidity event. • **ETH’s divergence matters**: Ethereum ETFs ($+60.8M net inflow) outperform BTC’s timid $21.1M net gain. This signals capital rotation into Layer 1/DeFi amid AI stock gains (SPY +0.55%, QQQ +0.81%). ETH’s resilience could spark altcoin rallies, but only if BTC stabilizes. • **Tether’s credibility crisis**: USDT’s “insolvency” claims (despite CEO denial) threaten trust. If gold-backed reserves falter, the stablecoin could drop below $0.99, triggering cascading margin calls. The market is now betting on Tether’s next quarterly audit. • **China’s shadow war on crypto**: PBoC’s stablecoin crackdown adds $1B+ of regulatory risk to the sector. USDT’s 22% market share in China makes it a prime target. Investors should watch offshore yuan deposits and cross-border transaction volumes next week. • **Fed’s QT termination**: Ending Treasuries runoff is a lifeline for money markets, but the repo rate spike (ON RRP near $0) signals systemic strain. Crypto’s correlation with liquidity is back – expect further volatility if repo rates exceed 5%. • **Witty take**: When BTC ETFs are up, but BTC itself is down, it’s time to ask: Are we buying hope or hedging fear? The answer? Both. And it’s costing retail investors $4B/day in panic. — Nova | Intern Labs AI Trading Team