On-chain data show that multiple top institutions and exchanges, including Wintermute, Coinbase and Binance, have recorded massive net Bitcoin purchases. The market interprets this as concentrated positioning by institutional investors ahead of a major macro event. However, some analysts warn that behind such highly synchronized moves, there may be “pre-meditated market manipulation.” All eyes are now on tonight’s Federal Reserve rate decision, a “key battleground for bulls and bears” that will determine whether the recent flood of capital marks the beginning of a feast, or the prelude to a retreat.

Analyzing the Drivers Behind the Cryptocurrency Rally

The latest rise in Bitcoin and Ethereum is not a broad-based rally driven by retail sentiment, but one underpinned by solid capital flows and structural factors.

1. Concentrated Inflows of Institutional Capital

The core driving force in the current market comes from improving expectations around global liquidity and a re-pricing of the policy environment. Against this backdrop, policy shifts by key financial institutions have become the spark.

On the one hand, asset-management giant Vanguard has lifted its restriction on buying spot Bitcoin ETFs, and Bank of America has allowed its tens of thousands of financial advisers to allocate 1%–4% of client assets into cryptocurrencies. This has opened the floodgates for large-scale inflows of capital from traditional financial markets.

On the other hand, on-chain data clearly record the actions of institutions: the total Bitcoin balance on major trading platforms has fallen to a cycle low of around 2.936 million coins, meaning more Bitcoin is being withdrawn from exchanges into long-term storage. At the same time, exchanges such as Binance have seen massive net inflows of several thousand Bitcoins over the past 24 hours, indicating extremely strong buying interest.

This coexistence of “declining exchange balances” and “large net inflows to platforms” is a classic characteristic of institutions “buying and hoarding.”

2. Market Focus on Bitcoin and Ethereum

This rebound is not an altcoin carnival; capital is highly concentrated in Bitcoin and Ethereum. As top market maker Wintermute has pointed out, in an environment of persistent macroeconomic uncertainty, investors’ risk appetite has become “selective,” with interest narrowing to just these two leaders.

This reflects that, when the market is searching for direction, capital tends to concentrate in the most liquid assets with the broadest consensus. It is a kind of “flight to quality” defensive offense strategy.

3. The Origins and Warnings Behind the “Market Manipulation” Narrative

Voices alleging “pre-meditated manipulation” partly stem from observations of certain highly leveraged traders’ behavior. For example, trader James Wynn, who has repeatedly and accurately warned of short-term downturns, turned bullish after closing his short positions, while warning that a “bloodbath” may follow after the rebound.

This practice of using one’s influence in tandem with position shifts has intensified concerns that short-term prices may be artificially influenced.

However, at a deeper level, current Bitcoin balances on exchanges are at historical lows, meaning the tradable float is relatively scarce. Under such conditions, concentrated buying by large players can more easily exert outsized impact on prices.

Therefore, the so-called “manipulation” doubts in essence reflect a reality: in a backdrop of tightening supply, institutional giants’ power over market pricing is steadily increasing.

Fed Night: Three Scenarios and Their Implications for Crypto

For tonight’s December Federal Reserve rate decision, the market has almost fully priced in a 25-basis-point rate cut, so the rate move itself has largely been digested. The real impact will come from the Summary of Economic Projections (SEP) released with the meeting and Chair Powell’s wording in the press conference.

Below are three possible scenarios and their potential implications for the cryptocurrency market:

Scenario 1: Dovish Cut

The Fed announces a rate cut and the dot plot suggests there is still room for further cuts in 2026. Powell emphasizes concerns about economic growth or labor-market weakness, and downplays stubborn inflation.

This would confirm that an easing cycle has begun and further improve expectations for global liquidity. Risk assets would likely receive broad support, and cryptocurrencies, as high-beta assets, could see sharp gains, with Bitcoin’s upside momentum significantly strengthened.

Scenario 2: Hawkish Cut

The Fed announces a rate cut, but the dot plot shows policymakers expect the pace of cuts to slow or pause in 2026. Powell stresses that the fight against inflation is not over and warns against having excessive expectations for consecutive cuts.

This would be interpreted by the market as “a pause within a hiking cycle.” The dollar could strengthen and risk assets come under pressure. Cryptocurrencies would likely experience a sharp “sell-the-news” pullback, short-term long positions would be tested, and the market might re-test lower support levels.

Scenario 3: Surprise Hold

Due to concerns over missing data or severe internal disagreement, the Fed unexpectedly decides to leave rates unchanged.

This would completely defy market consensus and trigger sell-offs across all risk assets. Given their high leverage, cryptocurrencies could experience a “bloodbath” driven by cascading liquidations, with declines far exceeding those in equities.

This crypto rally, driven by institutional capital, is the result of shifting expectations around macro liquidity, easing policies from financial institutions, and a tightening supply structure in the market. It signals that cryptocurrencies are increasingly being incorporated into traditional asset-allocation frameworks.

However, tonight’s Fed meeting will serve as a stress test for this uptrend. Whether dovish signals inject new fuel into the bull market, or hawkish remarks trigger a deep correction, is about to be revealed.