Can the Crypto Market Stabilize Before Key Macro Events? On-Chain Signals Show Concern

The crypto market is experiencing heightened turbulence as macroeconomic catalysts converge this week. With the U.S. GDP announcement scheduled for December 23, followed by jobless claims data on December 24, traders are bracing for volatility. The tension is already palpable, as evidenced by over $250 million in liquidations flooding the market in the past 24 hours alone, with long positions accounting for $192 million of those losses.

Market Under Pressure: Price Weakness Amid Uncertainty

Bitcoin (BTC) currently trades at $87,546, down 2.4% over the last day as it struggles to maintain support following rejection near the $90,000 level. Ethereum (ETH) has mirrored this weakness, declining by approximately 2.6%, while XRP has also participated in the broader correction. The overall cryptocurrency market capitalization has contracted 2.46%, settling at $2.96 trillion.

The Crypto Fear & Greed Index has plummeted to 24, reflecting extreme pessimism across the investor base. Yet interestingly, total derivatives open interest has ticked up 1.1% to $129 billion, suggesting traders are not entirely capitulating—instead, they’re positioning defensively while awaiting clarity from upcoming economic data.

Critical Week for Risk Assessment

The macroeconomic calendar presents several pivotal moments. The Federal Reserve injected $6.8 billion of fresh liquidity into the financial system on December 22. The U.S. GDP figures will provide crucial insight into economic momentum heading into year-end. Beyond U.S. data, China’s M2 money supply release on December 26 adds another variable to the equation, as global liquidity conditions influence risk appetite for digital assets.

On-Chain Metrics Reveal Deeper Concerns

CryptoQuant analyst Mignolet has raised important red flags based on on-chain data patterns. The firm’s research highlights a troubling divergence that first surfaced in August: while Bitcoin and other cryptos rallied at that time, trading volume on major futures venues failed to confirm the advance. This classic buy-volume divergence remains unresolved and hasn’t produced a meaningful reversal signal.

More alarmingly, active address counts are now contracting sharply, indicating that network participation and genuine user engagement are declining. This reduced on-chain activity suggests the current rally may lack the retail and institutional breadth necessary to sustain higher prices.

Mignolet’s analysis suggests that both trading activity metrics and network health indicators point to weakening buying pressure across the market. The combination of falling participation and elevated open interest creates a potentially precarious setup—traders holding positions but fewer participants actively accumulating.

What Comes Next?

Based on these technical and on-chain signals, the crypto market likely requires additional time before stabilizing. The confluence of weak on-chain participation, unresolved volume divergence, and imminent macro events creates a scenario where caution is warranted. Investors should monitor the GDP release closely, as weaker-than-expected growth or Fed policy signals could intensify current selling pressure. Conversely, resilient economic data might provide the catalyst needed to reverse the present pessimism and restore confidence in digital assets.

Bhushan is a FinTech enthusiast with expertise in financial market dynamics. His focus on economics and blockchain technology drives continuous analysis of cryptocurrency markets. He remains committed to sharing insights and learning from emerging trends in digital finance.