Crypto Hedge Funds Retreat To Stablecoins Ahead of Rate Cut – Data Warns of a Familiar Pattern

Bitcoin is holding agency above the $92,000 degree after rebounding from a transient dip to $90,000, however market sentiment stays decisively bearish. Despite the crypto market stabilization, confidence is fragile as merchants brace for heightened volatility forward of the December FOMC assembly. Bulls are trying to regain momentum, but the broader market continues to place defensively.

According to a detailed report by XWIN Research Japan, crypto hedge funds and huge institutional gamers are shifting into clear risk-off mode. On-chain knowledge reveals a notable divergence: BTC balances on centralized exchanges are falling, whereas USDT and USDC reserves are steadily climbing.

This conduct signifies that skilled buyers are decreasing direct crypto market publicity and as a substitute build up stablecoin liquidity on exchanges—capital that may be deployed quickly relying on the FOMC end result.

This rise in Stablecoin Exchange Reserves is a textbook signal of event-driven hedging. Institutions are getting ready for volatility slightly than betting outright on a directional transfer. Historically, such positioning emerges when markets count on significant coverage selections that might reshape short-term liquidity situations.

Funding Rates Reveal the Market’s True Positioning

According to the XWIN Research Japan report, Funding Rates make the present crypto market construction even clearer. During the August–October 2025 interval, funding surged as short-term merchants aggressively loaded into lengthy positions forward of the FOMC determination, solely to break down sharply as soon as the announcement was launched.

Bitcoin’s worth adopted the identical sample: a robust pre-event rally pushed by expectations, adopted by a swift reversal as leveraged merchants had been pressured to unwind. This matches the historic sequence of rate-cut expectations adopted by a short-term rally, and a post-announcement deleveraging and decline.

The report highlights that at the moment’s crypto market is displaying comparable behaviors. CME futures open curiosity has stalled, signaling that institutional merchants are avoiding high-conviction directional bets. Whale spot holdings stay flat, suggesting that main gamers are positioned defensively slightly than accumulating. At the identical time, stablecoin inflows are accelerating, a hallmark of event-driven hedging as capital waits on the sidelines for readability.

As XWIN Research Japan notes, whether or not the Fed cuts charges or not, one sample stays constant: volatility expands sharply throughout FOMC week. The hazard lies in chasing the pre-meeting bounce with out respecting the historic tendency for post-announcement shakeouts. In this surroundings, threat administration—not prediction—is the successful technique.

Total Crypto Market Cap Holds Key Support But Lacks Momentum

The Total Crypto Market Cap chart reveals the market stabilizing across the $3.1 trillion degree after a sharp multi-week decline. This space sits simply above the 100-week transferring common, a traditionally essential dynamic assist zone that usually defines whether or not the broader cycle maintains bullish construction or shifts into deeper corrective territory. For now, patrons have stepped in to defend this area, stopping a breakdown that might have opened the door to a retest of the $2.7T–$2.8T space.

Despite the bounce, the construction stays fragile. The market continues to be buying and selling beneath the 50-week transferring common, which has now begun to bend downward—a signal that momentum has weakened throughout main belongings like Bitcoin, Ethereum, and key altcoins. Volume has not proven a robust surge on the rebound both, suggesting that institutional conviction stays cautious forward of the FOMC assembly and macro uncertainty.

A decisive reclaim of the $3.3T–$3.4T zone would shift momentum again in favor of bulls, opening room for a broader restoration. However, failure to interrupt above this cluster of resistance might reinforce the concept that the latest bounce is simply corrective. For now, the overall market cap hovers at a crossroads, with macro occasions prone to decide the subsequent main transfer.

Featured picture from ChatGPT, chart from TradingView.com