Markets in Late-Cycle Phase, Not Recessionary: QCP – Decrypt

The behavior in global financial markets is a classic late-cycle characteristic and not a signal of an imminent recession, Singapore-based crypto trading firm QCP Capital said in a Wednesday note, referring to a broad-based correction across equities, gold, and crypto markets.

Bitcoin is trading flat over the past 24 hours at around $91,750, attempting a recovery after a brief dip below $90,000, according to CoinGecko data. The pullback was amplified by thinner liquidity and persistent spot Bitcoin ETF outflows, underscoring the asset’s sensitivity to macro shifts, Decrypt was told.

“The reasons behind this round of broad-based asset corrections are highly consistent with tightening liquidity, a reversal in policy expectations, declining risk appetite, and valuation adjustments after excessive gains,” Tim Sun, a senior researcher at HashKey Group, told Decrypt.

The rapid repricing of investors’ sentiment and expectations amid macro uncertainty is evident in the odds of a quarter-point rate cut, which dropped from over 60% a week ago to 32.8% today, according to CME’s FedWatch tool data. On prediction market Myriad, owned by Decrypt‘s parent company Dastan, users put the chance of a 25bps rate cut in December at just 32%.

Duration-sensitive assets like Bitcoin, as a result, have been hit hard, QCP analysts noted, highlighting crypto’s lagging performance even as equities benefit from strong corporate earnings.

Equities, on the other hand, appear more resilient due to strong earnings from AI-based equities’ corporate capital expenditure and strong household balance sheets.

“We believe the broader financial markets are firmly past the early-cycle phase,” Jyotsna Hirdyani, South Asia Head at Bitget, told Decrypt.

She characterized the current environment as a “late-mid to early-late stage, where momentum is slowing, vulnerabilities are rising, and markets are more sensitive to macro shocks, but the classic recession markers are not flashing red yet.”

The U.S. credit spreads have widened only slightly, and systemic stress remains limited, suggesting the current correction is a positioning shakeout rather than a fundamental breakdown, Sun explained, echoing QCP Capital’s take.

Is the Bitcoin bottom in?

Regarding Bitcoin’s trajectory, analysts see a bottoming process underway but caution against expecting a rapid V-shaped recovery.

“Bitcoin’s bottoming process is primarily driven by liquidity, market sentiment, and the distribution of coin-holding,” the HashKey analyst said. “A weak rebound followed by range-bound bottom formation is the more probable scenario. A true trend reversal still requires stabilization in macro liquidity.”

While structural metrics like exchange balances suggest underlying resilience, “confidence is limited because liquidity conditions remain fragile and macro sentiment is weak,” Hirdyani added, stating that confirmation of a durable bottom would require “higher lows, improving ETF and spot inflows, and clearer policy signals.”

All eyes are now on the December FOMC meeting, which could provide the catalyst for a more sustained recovery if it delivers dovish language regarding the 2026 policy path.

Investor sentiment remains muted, with Myriad users putting a 63% chance on Bitcoin’s next move taking it to $85,000 rather than $115,000.