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Analysis: Bitcoin market sentiment hits an all-time low, contrarian investors believe that $60,000 is the bottom for BTC

According to Cointelegraph, the Bitcoin market sentiment index has fallen to an all-time low, with some contrarian investors believing that $60,000 may have become the bottom of this cycle.Data shows that the cryptocurrency fear and greed index dropped to a historical low of 7 over the weekend, indicating that the market is in a state of "extreme fear." Michaël van de Poppe, founder of MN Capital, pointed out that this indicator, along with the relative strength index, shows that the market is deeply oversold, a similar situation occurred during the 2018 bear market and the pandemic crash in March 2020, which may create conditions for a rebound.CoinGlass's liquidation heatmap shows that if the Bitcoin price rises by about $10,000, it could trigger the liquidation of over $5.45 billion in short positions, while a drop to $60,000 would only trigger $2.4 billion in liquidations. This imbalance may drive a short covering rally. However, structural risks in the market still exist.CryptoQuant data shows that Bitcoin is still far below its 50-day and 200-day moving averages, with a price Z-score of -1.6, indicating that it remains in a phase dominated by selling pressure. The net buying volume in the derivatives market has turned negative, and the Binance buy-sell ratio has also fallen below 1, showing strong selling pressure in the futures market.Analysts point out that stronger spot demand is needed to trigger a sustained rebound. From a longer-term perspective, historical data shows that Bitcoin bear market bottoms typically form below the 0.618 Fibonacci retracement level, which is currently around $57,000. If history repeats itself, the downside scenario could extend to $42,000.

The trend of de-dollarization is heating up, and Bitcoin is seen as an important variable challenging the dollar system

According to Forbes, discussions about the impact of cryptocurrencies on the traditional financial system have significantly intensified in the context of the 2026 Davos Forum. Analysts point out that Bitcoin is becoming one of the key assets in the "Anti-Dollar Trade," reflecting global investors' concerns about the uncertainty of U.S. policies.Jamie Dimon, the CEO of JPMorgan, who publicly called Bitcoin a "scam" in 2017, has shown a notable shift in stance. In November 2025, JPMorgan became the first major U.S. bank to issue dollar deposit tokens on a public blockchain. Although Dimon has not fully embraced Bitcoin, he has acknowledged that "blockchain is real" and continues to promote blockchain services for institutional clients. This move is seen as paving the way for further development in the crypto industry.Meanwhile, deVere Group CEO Nigel Green warns that structural cracks are emerging in the dollar's dominance. He points out that the frequent fiscal standoffs and government shutdown risks in the U.S. are undermining the three pillars that support the dollar's status as the global reserve currency—institutional stability, fiscal credibility, and policy predictability. The current partial government shutdown threatens over $1.2 trillion in federal spending, exacerbating market pricing of U.S. political risks. Green believes that in this context, a multipolar currency system is becoming more realistic. In addition to the euro, yen, and some emerging market currencies, digital assets are also beginning to be included in strategic hedging discussions. Central banks around the world have been continuously reducing their dollar reserves and increasing allocations to gold and other currencies in recent years, while political shocks are accelerating this trend.

4E: Japan's interest rate hike expectations trigger a chain reaction, Bitcoin falls below 84,000, and the end of QT by the Federal Reserve becomes a key variable

According to 4E observations, market sentiment suddenly turned cold on December 1, with Bitcoin briefly dropping to $83,786, a nearly 30% decline from the early October peak. The core trigger came from a sharp rise in expectations for a rate hike by the Bank of Japan: traders priced in a 76% chance of a rate hike in December, and nearly 90% for January next year. After Ueda Kazuo signaled "preemptive tightening," Japan's two-year government bond yield rose to a 16-year high, and funds began to rapidly adjust for a potential policy shift. The rate hike expectations have backfired on global risk assets, with yen carry trades seen as a potential systemic risk point—markets still remember the turmoil caused by the yen's sharp rise in August this year, which triggered a global chain sell-off.Another heavy blow came from MicroStrategy (MSTR). The company announced a cash reserve of $1.44 billion and for the first time acknowledged the possibility of selling Bitcoin under certain conditions, shaking its core narrative of "never selling." The stock plummeted by 12% at one point. Although it still increased its holdings by 130 BTC last week, the pressure from debt combined with market turbulence has made sentiment more sensitive.On the macro front, the probability of a 25bp rate cut by the Federal Reserve in December rose to 87.6%, and QT will officially end today. Over the past two years, QT has withdrawn more than $2 trillion in liquidity, and stopping the balance sheet reduction is seen as a key event for the current liquidity bottom, which may help ease short-term market panic.4E Commentary: The expectations of a rate hike in Japan and MSTR's "selling" hint have triggered a rapid repricing of sentiment, compounded by declining trading volumes and the looming risk of yen carry trades, leaving the short-term market in a fragile range. The end of QT by the Federal Reserve is one of the few positive signals, which will determine whether risk assets can enter a "policy buffer period." A restoration of risk appetite will need to wait for the implementation of Japanese policies and a stabilization signal from BTC to resonate.
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