Matrixport Market Watch: Repricing After a High-Level Pullback, Crypto Market Enters a New Phase of Stock Game

Recently, the global market has shown a subtle balance amid high-level fluctuations. On one hand, expectations of interest rate cuts and marginally weakening macro data have provided some support for risk assets; on the other hand, geopolitical uncertainties have led to a distinct market risk appetite characterized by “upside resistance and heightened sensitivity to pullbacks.” Against this backdrop, capital allocation strategies are shifting from a pursuit of growth to an emphasis on defense and certainty.

The strong performance of gold (up 6.15% in December) confirms this logic, as traditional defensive assets have seen increased capital allocation. Meanwhile, although the stock market has demonstrated index resilience, its internal structure is undergoing profound changes: funds are quietly flowing from high-valuation, crowded sectors to value and cyclical sectors with more visible cash flows, forming a “stable index, changing structure” rebalancing pattern.

The cryptocurrency market is inevitably subject to amplified impacts from macro sentiment and capital flow fluctuations. Currently, the market is experiencing a typical high-level correction and repricing process.

Crypto Spot: Entering the “Rebalancing Phase,” Lacking Trend-Driven Momentum

Bitcoin experienced a pullback after approaching around $126,000, and is now mainly trading within a highly volatile range of $85,000 to $95,000. This pattern can be seen as the market’s “repricing” and “rebalancing” after failing to break higher. On-chain data shows that selling pressure from long-term holders has marginally eased, but overall incremental buying remains cautious, with more buying on dips rather than aggressive chasing.

Capital flows are a key window for observing short-term sentiment. The capital flows of spot Bitcoin ETFs are having an increasingly significant impact on the market: continued net outflows will suppress marginal buying power; only when outflows converge and turn into sustained inflows is it more likely to inject momentum for a renewed trend.

Futures and Options: Leverage Cleared, Market Returns to “Healthy Game”

Excessive leverage in the futures market has been significantly cleared. Open interest (OI) has fallen to safer levels, greatly reducing the risk of cascade liquidations. A noteworthy signal is that the BTC forward contract basis once turned negative, and under the influence of hedging activities, the spot-futures price spread has narrowed to its lowest level in a year, reflecting a cooling of market optimism and heightened risk management awareness.

The options market reveals signs of gradual sentiment recovery. The implied volatility (IV) of BTC and ETH options has retreated from high levels, indicating that the market is moving from panic pricing for “sudden shocks” back to a more normalized pricing model. Although the skew in implied volatility shows that the market still has some short-term concerns about pullbacks, overall sentiment is recovering. In the current position structure, call options still dominate, and with a large number of options expiring on December 26, key strike prices have become important short-term resistance and support levels.

Crypto Stocks: Premiums Recede, Value Reassessment Underway

The stock performance of crypto-related listed companies also reflects the market’s return from frenzy to rationality.

• Digital Asset Trusts (DAT): Their market value to net asset value ratio has fallen back to nearly 1x, and the significant premium from “equity packaging” in the early stage has been greatly compressed. Their stock price volatility is amplified by “coin price pullbacks” and “potential financing dilution expectations.”
• Mining and Computing Power Sectors: Valuations have become clearly differentiated. Companies relying solely on computing power operations have valuations more dependent on cost control and capacity expansion efficiency; while companies with high-quality power and data center resources benefit partially from the market’s “repricing” of their infrastructure’s potential cash flow in the AI computing power sector.
• Exchanges and Compliance Platforms: As bridges connecting the traditional and crypto worlds, the scarcity premium of their licenses and compliance channels still exists, but future valuation increases will rely more on the actual realization of institutional business penetration and recurring revenue.

Summary and Strategic Outlook

The current crypto market is in a “rebalancing after a high-level correction” phase. Macro uncertainty suppresses risk appetite, and the market lacks a clear one-sided trend driver. Futures market leverage has normalized, options market volatility has declined, and the overall pattern is closer to a “healthy stock game.”

In this environment, trend traders may need more patience, waiting for clearer signals from the macro or capital side. For investors focusing on current market characteristics, the following strategic ideas may be considered:

• Neutral in Volatile Ranges: Consider products such as FCN (Fixed Coupon Notes) or dual-currency investments, which aim to capture potential coupon income by selling volatility.
• Bullish with Buy-the-Dip Approach: Consider using discounted Accumulators (accumulation options) to build positions in batches during market fluctuations, and use their Knock-Out (KO) mechanism to control the risk of chasing highs.
• Bearish or Seeking Hedging/Reduction: Decumulators (decreasing options) or Covered Call strategies can help reduce positions in batches with premiums during volatility, or provide downside protection for spot holdings.
• Need Liquidity and Avoid Forced Liquidation Risk: For investors needing financing but unwilling to bear margin call risk, non-margin-call financing products offer a low-interest and controllable risk option.

The market’s return to a calm “repricing” process after the noise is often the beginning of a new cycle. Maintaining sensitivity while defending, and seeking structure within balance, may be the better approach at this stage.

All of the above content comes from Daniel Yu, Head of Asset Management. This article represents the author’s personal views only.