The Dow Jones continued its strong rally in December, hitting its all-time on record. It has now risen in the last seven consecutive months, the longest winning streak in years. It is up by about 30% from its lowest level this year. Here are the top catalysts that may impact the blue-chip index in December.

Dow Jones Index and DIA ETF to react to the Federal Reserve interest rate decision 

The main catalyst for the Dow Jones Index will be the Federal Reserve’s final interest rate decision of the year.

Most analysts believe that the bank will cut interest rates by 0.25% in this meeting, a move that will bring the benchmark rate to between 3.50% and 3.75%. Odds of this scenario have jumped to over 80% on Polymarket, the popular prediction marketplace.

Most importantly, the Federal Reserve will end its quantitative tightening policy that has reduced its balance sheet in the past few years today.

Odds of a rate cut have intensified after the recent government shutdown and as the labor market remains under pressure, with the unemployment rate rising to 4.6%. At the same time, while Trump tariffs have boosted inflation, the impact has been milder than expected.

The other notable catalyst for the Dow Jones Index will be Donald Trump’s decision on who will be the next Federal Reserve Chair. In a statement on Monday, the president said that he had already decided on who will become the next chair, with most traders betting on Kevin Hassett. In an interview on Sunday, Hassett said:

“We had a great Treasury auction, interest rates went down and I think that the American people could expect President Trump to pick somebody who’s going to help them have cheaper car loans and easier access to mortgages at lower rate.”

Santa Claus rally 

The other potential catalyst for the Dow Jones Index is the so-called Santa Claus rally, a situation where stocks and other financial assets rally towards Christmas Day.

The general idea is that Santa Claus rewards these investors and pushes the markets upwards. As a result, it is common for investors to invest in stocks, mostly after the Thanksgiving weekend.

However, historical data shows that the stock market is usually mixed towards Christmas. For example, the Dow Jones Index dropped from $45,000 in the first week of December last year to $41,900 in the first  week of January.

A different scenario happened a year earlier, when the Dow Jones jumped from $35,385 in the final week of November 2023 to $37,700 in the final week of the year. Therefore, it is hard to predict whether the Santa Claus rally will boost the Dow Jones Index this year.

Top earnings to impact the stock market 

The other notable catalyst for the Dow Jones Index in December will be some key corporate earnings, which will provide more color on the state of the market. 

However, most significant companies have already published their results, which have been solid. Data by FactSet shows that the average earnings growth was over 13.6%, the fourth consecutive quarter of double-digit growth.

The only Dow Jones company that will publish its results this week is Salesforce. The other most important companies that may have an impact on the index this month are Oracle, Micron Technology, Nike, FedEx, Broadcom, Costco, and Adobe. ​​

Meanwhile, the Dow Jones Index will react to any developments on artificial intelligence, where some analysts are warning it could be a bubble. Other potential catalysts are geopolitics, including the Russian and Ukrainian war and the potential escalation between the US and Venezuela.

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Nio stock price has plunged in the past four consecutive weeks as investors reacted to its recent financial results. Its US shares dropped to a low of $5.50, its lowest level since August 18 this year. It has dropped by over 30% from the highest point this year. 

Nio stock price dropped after earnings

Nio, one of the biggest electric vehicle companies in China, has come under pressure in the past few weeks. This retreat accelerated recently after publishing its financial results, which showed that its business continued growing. 

Nio’s results showed that its vehicle deliveries rose to 87,071 in the last quarter from 61,855 in the same period last year. This growth was driven by its eponymous brand and its newer brands like ONVO and Firefly. In a statement, the CEO said:

“We are working closely with supply chain partners to ramp up production and expect total deliveries in the fourth quarter to reach between 120,000 and 125,000 units, reflecting a year-on-year increase of 65.1% to 72.0% and setting a new quarterly record.”

Consequently, Nio’s revenue continued its growth trajectory, growing by 16.7% to $3 billion from the same period last year. This growth confirm that there is strong demand for the company’s products despite the rising competition from firms like BYD and Xpeng.

Nio is moving towards profitability

The results also had other notable aspects, including an increase in the closely-watched gross profit margin. This margin increased from 10.7% to 13.7%, higher than BYD’s 6%. Nio is slowly catching up with other companies Xpeng and Tesla that have a gross margin of 20% and 17%, respectively

More numbers revealed that Nio has reduced its losses, which still remain at an elevated level. Its adjusted loss from operations improved by nearly 40% to $390 million, while its net loss improved to $488 million.

The management believes that the company will turn a profit soon now that it has completed its main product launches. It expects that a net profit will come possibly in 2026. 

Analysts, however, are more pessimistic, with the average estimate showing that its earnings-per-share will come in at minus CNY 6.99 this year, much better than the CNY 9.92 it made in the same period last year. The loss will then narrow to CNY 3.73 next year.

One major reason why the Nio stock price has crashed recently is that the company continues to be highly dilutive. It recently completed a $1.16 billion equity offering by selling over 209 million shares. 

The most recent dilution happened in October when the company issued 55 million shares to Deutsche Bank. This dilution aims to facilitate future exercise of options and other share incentive awards

Nio share price technical analysis

The daily timeframe chart shows that the Nio share price has crashed in the past few months. It has dropped from the year-to-date high of $8.05 in October to the current $5.5, its lowest point since August 21.

Nio has moved to the 50% Fibonacci Retracement level. It also dropped below the 50-day and 100-day Exponential Moving Averages.

It also moved below the important support level at $6.28, its lowest level on October 16. The Relative Strength Index (RSI) has also continued falling, while the stock has formed a head-and-shoulders pattern.

Therefore, the stock will likely continue falling as sellers target the 61.8% retracement level at $4.95. 

READ MORE: NIO stock’s recent pullback is a gift for long-term investors: here’s why

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Salesforce stock price remained under intense pressure in November as concerns about the company’s AI business continued. CRM was trading at $230 on Monday, down by 37% from the year-to-date high, making it one of the top laggards in the Dow Jones Index. So, will the CRM stock rebound or continue crashing ahead of its earnings this week?

Salesforce stock price technical analysis points to more downside 

The daily timeframe chart shows that the CRM stock price has crashed in the past few months. This crash happened after the stock formed a double-top pattern at $367 and a neckline at the support at $312. A double-top is one of the most popular bearish reversal signs in technical analysis.

The stock has remained below the 50-day and 200-day Exponential Moving Averages (EMA), a sign that bears remain under control for now. It also remains below the Supertrend and the Ichimoku cloud indicator.

Most importantly, the stock has formed a descending pattern, with the key support level being at $228.48 and the descending trendline, which connects the highest swings since May this year.

Therefore, the stock will likely have a bearish breakdown when it moves below the lower side of the descending triangle pattern. A move below the support will point to more downside, potentially to the key support level at $200. 

The alternative scenario is where the stock rebounds after earnings as bulls target the upper side of the descending trendline at $250.

Salesforce earnings preview 

Salesforce, the biggest company in the CRM industry, will report its financial results this week and provide more color on its business.

The company’s revenue rose by 10% in the third quarter to $10.2 billion, with its subscription and support revenue rising by 11% to $9.7 billion. These results and its guidance were better than expected.

Its guidance was that its business would make between $10.24 billion to $10.29 billion, representing an annual growth rate of between 8% and 9%. That figure would bring its full-year revenue to between $41.1 billion and $41.2 billion.

The main concern among investors is that its investments in the AI industry, where it is focusing on AgentForce, is not helping its revenue growth accelerate.

Data compiled by Yahoo Finance shows that the average revenue will be $10.27 billion, up by 8.7% from the same period last year. Its earnings-per-share (EPS) is expected to move from $2.41 last year to $2.86. 

Salesforce has always been a highly conservative company, meaning that its revenue and earnings will likely be better than its guidance and what analysts expect.

Another positive is that the company has become a bit undervalued, with its forward price-to-earnings ratio being 20.36, lower than the sector median of 23.57. This figure is also much lower than its five-year average of 36.

Similarly, the forward PEG ratio of 1.22 is lower than the sector median of 1.6.

Analysts have a relatively bullish outlook for the stock, with the average target being $325, much higher than the current level of $230. The most recent estimates were from companies like Jeffries, Cantor Fitzgerald, Barclays, and Evercore.

READ MORE: Salesforce stock price forms H&S: brace for a crash

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Borrow cheap yen, invest in higher-yielding assets, pocket the spread: repeat with leverage.

That simple idea, known as the yen carry trade, has fueled enormous profits for hedge funds and global investors for decades.

But when market conditions shift, this strategy unravels spectacularly, wiping out positions and triggering cascading selloffs across global markets.

Today, with the Bank of Japan hinting at raising rates and the interest-rate gap narrowing, the trade is far less carefree than it was a year ago.​

What the yen carry trade actually is

Here’s how it works in plain English. Japanese interest rates have hovered near zero for years, while US rates sit around 4.2%, a massive spread.

A trader borrows ¥100 million at 0.5% and converts it to dollars. They invest those dollars in US Treasury bonds yielding 4.2%.

The difference: roughly 3.7% is the profit, minus hedging costs. Scale this up with leverage, and modest rate spreads become real money.

Annualized returns on dollar-yen carry trades typically hover between 5% and 6%. In 2025, with USD/JPY trading around 156 yen per dollar, the trade remains profitable but increasingly fragile.​

The strategy has attracted hedge funds, banks, and even Japanese retail traders betting the yen stays weak or stable.

But it’s built on a dangerous assumption: that interest rates stay where they are and currency markets don’t move sharply. When that assumption breaks, everything implodes.​

How traders turn tiny rate gaps into big returns, and losses

The magic is leverage. Suppose a trader borrows $10 million in yen at 0.5% to buy US bonds yielding 4%.

The raw spread of 3.5% earns $350,000 annually: solid, but not earth-shattering. Add five-to-one leverage, and that $350,000 becomes $1.75 million.

Double it again, and suddenly the carry trade looks irresistible.​

But leverage cuts both ways. If the yen appreciates just 2% against the dollar, a leveraged position loses money fast.

In August 2024, when the Bank of Japan surprised markets by raising rates from 0.1% to 0.25%, the yen surged 6% in a week.

Traders holding heavily leveraged carry positions faced margin calls, demands to post fresh collateral, or liquidate positions immediately.

The ensuing forced selling spread panic through stocks, bonds, and currencies. The VIX, a measure of market fear, spiked to 65, levels normally reserved for financial crises, despite no underlying economic collapse.​

When the carry trade goes wrong

Three warning signs suggest danger ahead. First, watch USD/JPY. If the exchange rate falls sharply, meaning the yen strengthens, carry trades face immediate losses.

Second, monitor the interest-rate gap. As of November 2025, the gap has narrowed to roughly 3.7% from historical highs above 5%, reducing the profit margin. Even a 0.3–0.5% yen move can erase months of gains.

Third, track BoJ signals. Governor Ueda has signaled a gradual path to rate hikes if inflation stays near 2.7%. Tighter policy ahead means a smaller carry-trade spread and more borrowing costs.​

Watch these checkpoints: USD/JPY exchange rate, the BoJ policy meeting calendar, US-Japan interest-rate differentials, and the VIX. When VIX spikes above 40, leverage-heavy positions typically crack.​

The yen carry trade can be a steady earner in calm markets, until it isn’t.

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A crypto crash is happening this month, erasing billions of dollars in market capitalization from top coins like Bitcoin, Ethereum, Tron, Dogecoin, and Shiba Inu. This plunge is a continuation of what happened in November when Bitcoin and most altcoins fell. 

This article explores some of the top reasons why the crypto market crash is happening and whether the industry will recover.

Crypto crash is happening as the industry face numerous headwinds 

The ongoing crypto crash, which has caused investors over $1 billion in losses, has been triggered by numerous bearish headwinds.

First, crypto prices are falling after S&P Global, a top rating agency, downgraded Tether, the biggest stablecoin company, to junk status.

The company noted that Tether is a much more different company than other similar companies in the way it backs its stablecoin. Instead of holding cash and short-term investments, the company backs USDT by several assets like gold, Bitcoin, commercial paper, and loans.

While this model has worked well from years, S&P Global believes that it puts Tether at risk if these asset prices plunge, claims that Tether has denied. The report said:

“A drop in the Bitcoin’s value combined with a decline in value of other high-risk assets could therefore reduce coverage by reserves and lead to USDT being undercollateralized.”

Tether’s downgrade is notable because of its role in the crypto industry. Data compiled by Artemis shows that there are $165 billion of USDT in circulation and 28 million holders. Also, the adjusted volume for USDT stood at over $1.3 trillion in the last 30 days.  As such, a collapse would be the biggest black swan event in the industry.

Crypto liquidations rise as the Fear and Greed Index slips

The crypto crash also happened as liquidations rose to nearly $1 billion, reminding investors of what happened on October 10 when tokens worth over $20 billion were liquidated. 

Analysts believe the real number of liquidations is much higher than the reported one as exchanges don’t share all the data. According to CoinGlass, liquidations rose to over $800 million on Monday this week. Most people who were liquidated are those who bought cryptocurrencies last week, expecting the rebound to happen.

The crypto market also crashed as a sense of fear spread in the industry. Data compiled by CoinMarketCap shows that the Crypto Fear and Greed Index remains in the fear zone of 16.

This fear increased after Strategy’s CEO hinted that the company may decide to sell its Bitcoin holdings to pay dividends if the mNAV dropped below 1. Such a drop is possible if Bitcoin and the MSTR stock price crash accelerate.

In a bid to calm the markets after that statement, the company noted that it had $1.4 billion reserve to fund its dividend and interest payments.

Why a crypto market rally is possible 

Still, despite these challenges, there are reasons to believe that the crypto market recovery will happen this month.

First, the Crypto Fear and Greed Index has moved to the extreme fear zone, a move that may trigger a rebound in the near term. In most cases, crypto market bull runs start whenever the sentiment is weak.

Second, Bitcoin price remains above the important support level at $80,000, a sign that it may be slowly forming a double-bottom pattern, which is one of the most common bullish reversal patterns in technical analysis. In the case, chances of a rebound remain as long as the price is above that support level.

Third, the industry may benefit from the upcoming interest rate cut by the Federal Reserve. Economists and traders believe that the bank will cut interest rates on December 15, a move that will bring the benchmark rate to between 3.50% and 3.75%. A rate cut and the end of the two-year quantitative tightening process will boost crypto prices.

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Rolls-Royce share price remains under pressure this month, moving from the year-to-date high of 1,195p in September to the current 1,040p. It is hovering near its lowest level since August this year. So, will the stock rise or fall in December this year?

Rolls-Royce share price technical analysis

The daily timeframe chart shows that the Rolls-Royce stock price has pulled back in the past few months, moving from the year-to-date high of 1,195p in September to the current 1,040p.

A closer look shows that the stock has formed a double-top pattern, a common bearish reversal pattern in technical analysis. It has now moved below the important support level at 1,090p, its lowest point in October.

The stock has now moved below the 50-day Exponential Moving Average (EMA), a sign that bears are gaining control for now.

It has also moved below the Supertrend indicator. The last time this indicator turned red was in April when it dropped from a high of 806p in March to a low of 555p in April this year. 

The Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued falling, with the PPO falling below the zero line. Also, the RSI is nearing the oversold level at 30.

Therefore, the most likely scenario is where it continues falling as sellers target the next support level at 1,000p. A move below the support 1,000p will point to more downside. 

On the flip side, a move above the key resistance level at 1,090p will invalidate the bearish outlook, and point to more upside in the near term.

Rolls Royce Holdings has potential catalysts ahead

Rolls-Royce Holdings’ business is doing well, helped by the robust demand of its key products and services.

The most recent trading statement showed that its business was doing well, with wide-body orders rising. It recently received orders from companies like IndiGo and Malaysia Airlines. 

The company’s defense business is also doing relatively well as demand from countries in Europe and the United States rise.

Most importantly, the company has become a major player in the artificial intelligence (AI) industry, where its power generators are used to provide backup power to companies in the data center industry. It now plans to launch a new fast-start generator that will become available in 2028. 

Most importantly, the company’s SMR business has substantial potential as demand for nuclear energy continues rising. It is now in the final stage of the Swedish competition to select a nuclear energy partner. 

It has already won a deal with the UK government, and is in the process of getting regulatory approval in the United States, where it seeks to compete with companies like NuScale and Oklo. This business has a lot of potential and analysts anticipate that it will get more deals, especially in the manufacturing and data center industries.

Additionally, the company has continued to improve its balance sheet, which has received strong ratings from companies like S&P Global and Moody’s. If has also continued to repurchase stock, a trend that may continue over time.

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The S&P 500 Index has rebounded in the past few days and is hovering near its all-time high. It rose for five consecutive days, as fears of an AI bubble cooled and as odds of a Federal Reserve interest rate cut rose on Polymarket. Here are some of the top catalysts for the blue-chip S&P 500 Index and its top ETFs like VOO and SPY.

S&P 500 Index to react to key US earnings 

One of the main catalysts to watch will be the upcoming earnings from some of the biggest companies in the United States. 

These earnings come at a time when most American companies have published strong numbers in the past few months.

FactSet data shows that 95% of all companies in the S&P 500 Index have published their third-quarter financial results. 

The average earnings growth of these companies was 13.4%, which was much higher than the average estimate of 8.3% before earnings.

For example, the most recent Nvidia earnings showed that the company’s revenue rose by over 55% in the third quarter to $57 billion, and the management expects that the fourth-quarter numbers will be $65 billion. This number will likely be much higher, especially if Donald Trump authorizes sales of its Blackwell chips.

Some notable American companies will publish their results this week. CrowdStrike, the cybersecurity company valued at over $118 billion, will publish its numbers on Monday. Other firms releasing their results on this day are OKTA, Box, and American Eagle.

Salesforce, the biggest company in the customer relations software industry will release its results on Tuesday. These results come as the stock remains under pressure after falling by 37% from its highest level in 2024. It has dropped as the company’s slowdown has continued, and as concerns about its AI business remained.

Other companies releasing their numbers on Tuesday are Guidewire Software, Dollar Tree, Five Below, and Thor Industries.

Additionally, top S&P 500 Index companies like Kroger, Hewlett-Packard, Ulta Beauty, DocuSign, Dollar General, and Hormel Foods will release their numbers on Thursday.

Holiday Sales growth 

The S&P 500 Index will react to reporting that American consumers remained resilient last week. Data shows that Black Friday sales were much higher than what analysts were expecting 

Retail sales excluding autos rose by 4.1% on Black Friday, higher than last year’s growth of 3.4%. Analysts were expecting the sales to remain under pressure because of the worsening labor market and elevated inflation. A report released last week showed that consumer confidence tumbled in November.

Trump plans for Venezuela 

The other main catalyst for the S&P 500 Index will be geopolitical ones after Donald Trump closes the airspace above Venezuela.

He said this as his administration continues to threaten more aggressive moves unless Nicholas Maduro exits. His forces, including the most lethal warship have been accumulating near Venezuela.

It is unclear whether Trump will invade Venezuela or accelerate strikes in the country. One option has been to launch strikes against Venezuela’s military installations.

An attack on Venezuela will have an impact on the S&P 500 Index because of the vast oil that the country sells, which would be interrupted.

Top US macro data to impact the S&P 500 Index 

Meanwhile, the US will publish some important macro numbers that will impact the S&P 500 Index moderately. 

One of the top numbers to watch will be the September Personal Consumption Expenditure (PCE) inflation report, which will come out Friday. This PCE report will provide more information about the country’s inflation and provide hints on what to expect from the Fed.

Other key numbers to watch will be the ISM manufacturing and non-manufacturing PMI reports, US manufacturing and industrial production data, and personal income and spending.

These numbers will come as investors predict what the Federal Reserve will do in the next meeting, with odds that it will cut rates rising.

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The NZD/USD exchange rate continued rising, crossing an important resistance level as a new Central Bank governor takes charge. The New Zealand dollar rose for six consecutive days, moving from a low of 0.5581 on November 20 to the current 0.5735. 

New Zealand signals end of cuts

The NZD/USD pair has rebounded in the past few days, soaring by nearly 3% from its November lows. This recovery accelerated last week after the bank delivered its interest rate decision. 

The bank slashed interest rates by 0.25%, with the exiting governor hinting that the pace of cuts has ended. It brought rates to 2.25%, meaning that it has slashed rates by 325 basis points in the last 15 months. It also left a 20% chance that the bank will cut rates again next year.

The bank slashed rates in a bid to boost an economy that recovered at a slower pace than other countries. Still, the main risk has been that inflation has remained at an elevated level this year. 

The headline CPI rose by 2.5% in the first quarter, 2.7% in Q2, and 3% in Q3, but the central bank expects the figure to continue moving downwards. Officials expect the figure to drop to 2% by mid-2026.

Most importantly, the central bank is optimistic that the economy will continue doing well in 2026. Officials are predicting that the economy will expand by 2.8% in the year through March 2027, supported by interest rate cuts.

Looking ahea, the next key macro event to watch will be the start of Anna Breman’s tenure as the head of the country’s central bank. She enters this role as the first foreigner and the first woman to do so. He previously served as the deputy governor of Sweden’s central bank. 

Odds of Federal Reserve rate cuts rise

The hawkish RBNZ has coincided with the fact that odds are that the Federal Reserve will maintain a highly dovish sentiment rise. Data compiled by Polymarket shows that officials anticipate that the bank will cut rates by 0.25% in the next meeting in December. 

Data also shows that odds that Donald Trump will appoint Kevin Hassett as the next central bank governor rose. Hasset currently serves as the Director of the National Economic Council at the White House. 

He is a Trump loyalist who will likely maintain a dovish tone by advocating more interest rate cuts. As such, if he has his way, there is a chance that he will bring rates to near 1% in 2025. 

NZD/USD technical analysis

NZDUSD chart | Source: TradingView

The daily timeframe chart shows that the NZD to USD exchange rate has rebounded in the past few days. It soared from a low of 0.5580 on November 20 to the current 0.5735 as the Fed and RBNZ divergence continued. 

The pair has now moved above the upper side of the descending channel that connects key levels since July this year. 

It has also moved to the strong, pivot, reverse point of the Murrey Math Lines tool at 0.5730. The pair also jumped above the 50-day moving average, while the Relative Strength Index (RSI) has pointed upwards.

Therefore, the most likely NZD/USD forecast is bullish as odds of a Fed and RBNZ divergence continue. If this happens, the next important level to watch will be at 0.5850, the Major S/R pivot point level. 

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The Nifty 50 Index is hovering near its all-time high as the Indian rupee slips and as the recent economic numbers point to robust performance in the third quarter, as tariffs against the United States remain. The index was trading at INR 26,200 a few points below the year-to-date high of INR 26,300.

Indian economy is doing well 

The Nifty 50 Index held steady on Monday after a report released on Friday showed that the Indian economy continued thriving in the last quarter.

This report showed that the economy expanded by 8.2% in the last quarter, the fastest growth rate in six quarters. Economists polled by Reuters expected the economy to grow by 7.4% after it expanded by 7.8% in the second quarter.

Analysts believe that the annual growth rate will be no less than 7%, which is higher than the expected range of between 6.2% and 6.8%. This view is supported by analysts from top companies like Citigroup, Goldman Sachs, and Morgan Stanley.

The economy has done well even as Donald Trump has maintained a 50% tariff on all Indian goods. He also implemented a surge in H1-B visa fees to $100,000, a level that most analysts believe are unaffordable to most people.

The growth was mostly driven by internal consumption as export growth remained under pressure in the quarter.

RBI rate cut in doubt

Ideally, a strong GDP report is a good thing for Indian companies because it means the economy is doing well. However, the risk is that it may prevent the Reserve Bank of India (RBI) from cutting interest rates later this week, as most analysts were expecting. 

Instead, analysts now believe that the bank’s decision on Friday will be a close call. This explains why bond yields have risen in the past few days as it moved to a high of 6.56% from last month’s low of 6.48%.

The other risk is that Indian stocks have become significantly overvalued as the Nifty 50 and Sensex Indices have remained near their all-time highs. Data shows that some big names in the Nifty trade at a price-to-earnings ratio of 50.

The most overvalued companies based on their price-to-earnings ratio are companies like Eternal Limited, Jio Financial, Trent, HDFC Life Insurance, Tata Consumer Products, and Nestlé India. All these companies have a PE ratio of over 80, meaning that they are more expensive than fast-growing companies like Nvidia.

Nifty 50 Index technical analysis 

The daily timeframe chart shows that the blue-chip Nifty 50 Index has held steady in the past few months. It has soared from the year-to-date low of INR 21,760 in April to the current INR 26,325.

The index has moved above the important resistance level at INR 26,000, a sign that bulls remain in control. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA) while the Relative Strength Index (RSI) pointed upwards.

Therefore, the most likely scenario is where the index continues rising, potentially to the key resistance at INR 26,500. A drop below the key support at INR 26,098, its highest point in October will invalidate the bullish outlook.

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A crypto market crash happened in November, with the valuation of all tokens dropping by over 20%. This decline happened after the aftermath of the October 10th liquidation event. Bitcoin price dropped from a high of $126,300 in October to a low of $80,495, while most altcoins had a steeper dive. So, will the market crash or rally in December?

Why the Crypto market crash happened in November

The crypto market crashed in November, even as American stocks soared to a record high. The Nasdaq 100 and S&P 500 indices have jumped by double-digits in the past few months and are now hovering at their all-time high.

Analysts, including popular investors like Tom Lee and Arthur Hayes, believe that the crash happened after the aftermath of the $20 billion liquidations on October 10. 

The liquidation event led to a sharp decline in futures open interest. Data compiled by CoinGlass showed that the open interest dropped by over 4.30% on Monday to $124 billion. Before the October 10 liquidation event, the open interest was over $250 billion. 

Crypto prices tend to underperform the market whenever the futures open interest is in a downtrend. The crash in November also coincided with the rising liquidation as millions of crypto investors were wiped out.

Additionally, the crypto market crash happened as American investors dumped their Bitcoin and Ethereum assets. Data compiled by SoSoValue shows that spot Bitcoin ETF outflows rose to $3.45 billion in November after adding $6.9 billion in the previous two months. Total inflow now stands at $57.71 billion.

Spot Ethereum ETFs also shed over $1.42 billion in inflows, bucking a 7-month trend of inflows. These funds now have cumulative inflows of over $12.94 billion. 

The crypto market crash also happened as the Crypto Fear and Index moved to the fear zone of 8, its lowest level this year. It is common for crypto prices to retreat when there is fear in the market. In most cases, however, the crypto market normally rebounds when the Fear and Greed Index moves to the extreme fear zone.

Potential catalysts for crypto prices in December

There are some potential catalysts for the crypto market in December. First, one potential catalyst for the crypto market is the Santa Claus rally, which is a situation where financial assets rebound towards Christmas.

Second, the crypto market rally may happen after the Federal Reserve delivers its interest rate decision on December 15. Analysts expect that the bank will deliver the third interest rate cut, bringing the benchmark rate to between 3.50% and 3.75%.

The initial rate cut will not be the main catalyst. Rather, investors will react to the forecast of what to expect in 2026. Signs that the bank will continue cutting rates will be bullish for the crypto market.

The other notable catalyst will be Donald Trump’s decision on who will be the next Federal Reserve chair, with most analysts expecting that it will be Kevin Hassett, who has supported aggressive rate cuts.

Meanwhile, cryptocurrencies may rebound because of the Crypto Fear and Greed Index, which has remained in the extreme fear zone zone. As CZ noted, it is always better to sell when there is maximum grees and buy when there is extreme fear.