Also Bitcoin Stabilizes as the Nasdaq Rebounds & Labor Market Data Isn’t Weak Enough to Justify More Cuts

͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­͏     ­

	Forwarded this email? Subscribe here for more Bitcoin Is Transitioning Out of the Strong Outflows Regime Also Bitcoin Stabilizes as the Nasdaq Rebounds & Labor Market Data Isn’t Weak Enough to Justify More Cuts Ecoinometrics Nov 28   READ IN APP   Welcome to Ecoinometrics’ Friday edition. Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis. Today we’ll cover: Bitcoin Is Transitioning Out of the Strong Outflows Regime Bitcoin Stabilizes as the Nasdaq Rebounds Labor Market Data Isn’t Weak Enough to Justify More Cuts Taken together, these charts show a market that has stabilized but hasn’t found its footing. Bitcoin is out of the liquidation loop, the Nasdaq has stopped sliding, and labor data isn’t weak enough to justify more easing. That leaves a clear risk for the weeks ahead: if the Fed decides not to cut in December or simply signals fewer cuts ahead, risk appetite could slip again, and Bitcoin’s stability may not hold. In case you missed it, here are the other topics we covered this week: Bitcoin Is Trading Inside a Persistent ETF Outflow Regime Ecoinometrics · Nov 24 Read full story Bitcoin’s Activity Looks Healthy But the Signal Is Misleading Ecoinometrics · Nov 26 Read full story Bitcoin Market Monitor - Key Drivers in Ten Charts: Bitcoin Market Monitor Ecoinometrics · November 18, 2024 Read full story Get these professional-grade insights delivered to your inbox: Upgrade to paid Bitcoin Is Transitioning Out of the Strong Outflows Regime What made Bitcoin drop harder than any other major asset in November was a liquidation loop. The price fell, that triggered ETF outflows, and those outflows pushed the price even lower. Once this kind of feedback loop kicks in, it usually doesn’t stop until flows stabilize. We use an ETF flows regime model to classify clusters of consecutive daily flows into three regimes: Strong inflows, which tend to correlate with a positive bias for Bitcoin’s returns. Neutral flows, which don’t have any clear directional bias. Strong outflows, which correlate with a negative bias for Bitcoin’s returns. The recent sequence that saw Bitcoin dip about 36% from its all-time high corresponds to the worst cluster of strong outflows since the March correction. You can see that on the chart below: a long block of deep blue bars marking sustained selling pressure. The good news is that this strong outflows cluster has ended. Flows have shifted into the neutral regime. That doesn’t mean ETF demand is back, but it does mean the forced-selling phase is over for now. Historically, the neutral regime is not where recoveries usually start. Returns don’t have a directional bias in this regime, so you shouldn’t read this as a bullish signal. What it tells us instead is that the liquidation loop has been broken. That’s still progress. The longer we can stay out of the strong outflows regime, the better it is for price stability. But Bitcoin is not out of the danger zone yet. The downside risk that we flagged earlier this week still applies. Daily Bitcoin ETF flows have just exited their worst strong-outflows cluster since March and moved into the neutral regime. That breaks the liquidation loop that drove November’s selloff, but without a shift to sustained inflows, it doesn’t yet signal a durable recovery. Bitcoin Stabilizes as the Nasdaq Rebounds The shift in ETF flows we discussed above helped Bitcoin produce a small bounce. But that turning point didn’t happen in isolation. Bitcoin and the Nasdaq 100 have been in the same risk-off environment since late October, and both assets tend to move together when macro sentiment swings. If we break this long drawdown into phases, the pattern becomes clear: Bitcoin sold off first as worries about U.S. tariffs, the government shutdown, and weaker sentiment weighed on equities as well. That was at the beginning of October. The Nasdaq then found its footing and began to rebound, which helped Bitcoin form a temporary floor. That lasted until the end of October. A second Nasdaq drawdown followed, and Bitcoin immediately slid again as ETF outflows accelerated. And now, with the Nasdaq staging another recovery, Bitcoin is showing signs of finding a new short-term floor. Because Bitcoin sits further out on the risk curve, and because it went through a liquidation loop, this rhythm isn’t a healthy one. The sequence is still lower highs and lower lows. But it does avoid the worst-case scenario: a Nasdaq drawdown deeper than 8%, which is uncommon enough to signal real macro stress. Had that happened, Bitcoin’s decline could have compounded quickly. So this isn’t a sign that Bitcoin’s problems are behind us. But it is a moment of respite, and for now the macro backdrop is not adding new pressure. Bitcoin has stopped sliding at the same time the Nasdaq 100 has rebounded from an –8% drawdown. Bitcoin remains deeper in its own drawdown due to ETF-driven liquidation pressure, but avoiding a larger Nasdaq correction has prevented further deterioration. Labor Market Data Isn’t Weak Enough to Justify More Cuts The next test for market sentiment is the December FOMC meeting. We’re still nearly two weeks out, and the market isn’t sure what to expect. The Fed had signalled one more rate cut for December, but the odds have swung from 99% to 50/50 and back up to roughly 85%. A big part of the uncertainty is the lack of fresh inflation data due to the U.S. government shutdown. Without that, the Fed is forced to lean harder on the labor market to justify its next move. And if they truly stick to a data-driven approach, the case for another cut looks weak. Continued unemployment claims illustrate this well. These measure how many people keep receiving unemployment benefits week after week, essentially a high-frequency gauge of labor market stress. After collapsing to unusually low levels post-COVID, continued claims have been rising in step changes of roughly one jump per year. We saw another step earlier this year, which the Fed highlighted as evidence of labor market weakening. But since that step up, continued claims have flattened. They’re holding around the same range as 2017, which is not a historically alarming level. So the labor data is no longer reinforcing the Fed’s argument that the job market is dangerously deteriorating. This makes the rationale for another rate cut much harder to defend on economic grounds. The Fed might still choose to cut due to market sentiment or political pressure, but the real risk now is how they frame forward guidance. If they are forced to acknowledge fewer cuts ahead, risk appetite could take another hit and that would not help Bitcoin’s fragile stabilization. Continued unemployment claims have leveled off after this year’s step-up, holding near their 2017 range. This stabilization undercuts the Fed’s argument that the labor market is weakening, making further rate cuts harder to justify, especially without fresh inflation data. That’s it for today. Thanks for reading. Cheers, Nick P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis. Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions. Ready for institutional-grade research that puts you ahead of the market? Click below to access our premium insights. Upgrade to paid You're currently a free subscriber to Ecoinometrics. For the full experience, upgrade your subscription. Upgrade to paid   Like Comment Restack   © 2025 Ecoinometrics 548 Market Street PMB 72296, San Francisco, CA 94104 Unsubscribe