1. Opening: What Do We See When the Tide Goes Out?

Greetings to all AscendEX readers, industry builders, and traders on the front lines:

I am Bin Huang. If you are reading this report, congratulations—you are living through one of the most brutal yet truthful moments of "purification" in cryptocurrency history.

This week (December 15–21, 2025), the global cryptocurrency market underwent a suffocating stress test. If the market was previously oscillating ambiguously between a "bull market correction" and a "bear market confirmation," a blockbuster report from CryptoQuant this week acted like a judge's gavel, slamming down on the heads of bulls—they officially declared: The Bitcoin Bear Market Has Begun.¹ This is not an emotional outburst, but a cold judgment based on the exhaustion of demand growth, the retreat of institutional capital, and the deterioration of on-chain data.

This week, we witnessed Bitcoin struggling in the quagmire between $88,000 and $90,000 ³, and saw BlackRock's IBIT ETF—once the "inflow-only" anchor—suffer an epic single-day net outflow.⁴ Yet, in this darkest hour, we also saw a deeply fractured landscape: on one side, the veteran DeFi protocol Loopring was delisted by Coinbase, marking the curtain call for an old era ⁵; on the other, the high-performance derivative protocol Hyperliquid (HYPE) soared against the wailing crowd ⁶, and MicroStrategy completed its metamorphosis into "Strategy Inc," pledging Bitcoin as the sole strategy for corporate survival.⁸

This is more than price volatility; it is a fracture in consensus and a Great Migration of Capital. Capital is fleeing ephemeral "vaporware" and flowing toward assets with real revenue, regulatory backing, and extreme performance. AI is draining primary market liquidity from Web3, while RWA (Real World Assets) remains the final bridge connecting traditional finance with the crypto world.

In this exhaustive weekly report brought to you by the AscendEX Research Institute, we will peel back the fog of emotion and use the most hardcore data and nuanced logic to review this tumultuous week. We do not sell anxiety, nor do we peddle cheap hope. We only provide what is essential to survive this winter—The Truth.

2. Market Overview: Liquidity Drain & The "Gravity" of Price

Data Cut-off: December 21, 2025, 23:59 UTC+8

The market this week characterized a disturbing "slow bleed on shrinking volume." Although Bitcoin retains gains Year-to-Date (YTD), this week's price action has severely damaged the market's final fantasy of a "Santa Rally." The drying up of liquidity makes every sell-off feel exceptionally heavy.

2.1 Core Asset Performance Review

The table below highlights key data changes for core assets this week, sourced from CoinMarketCap and CoinGlass:

2.2 Market Sentiment & Macro Indicators

• Fear & Greed Index: This Sunday's reading is 28 (Fear) ¹², a sharp drop from last week. The market shifted rapidly from "Greed" to "Fear," typically a signal of retail exodus.
• BTC Dominance: Climbed to 59.1%.¹² This is not only a high since 2021 but also a typical "risk-off" signal. In a zero-sum game, capital prioritizes the "General" (BTC) and abandons high-risk Altcoins.
• DeFi Total Value Locked (TVL): Ethereum remains dominant with a 54.82% share ¹⁴, while Solana holds about 7.34%. Despite price drops, on-chain capital has not fled en masse but is rotating defensively between protocols.

AscendEX Research Insight:

The most alarming data point this week is the collapse in Bitcoin trading volume. Mid-week, BTC volume shrunk by 53% to $16 billion.4 This indicates that both buyers and sellers are stepping aside: bulls dare not buy the dip, and bears dare not aggressively short at the $85,000 strong support. This state of "suffocation" rarely lasts long and often presages a violent unidirectional move. Considering options market data (see Section 8), downside risks appear to be accumulating.

3. Weekly Headlines: Deep Dive into Top 10 Stories

The events of this week not only determine the year-end trend but also lay the groundwork for the market landscape of 2026.

3.1 CryptoQuant Sounds the Alarm: Bitcoin Bear Market "Officially" Begins

Event Recap: On-chain analytics giant CryptoQuant released a bombshell report this week—Bitcoin demand growth has "decisively slowed" since early October 2025, with all metrics pointing to the start of a bear market cycle.¹

Deep Dive:

This is a cold judgment based on data, not an emotional outburst. The report notes that Bitcoin demand growth has broken below its long-term trend line. Crucially, CryptoQuant proposed two key price anchors:

1. $70,000 Intermediate Support: The final psychological defense line for bulls.
2. $56,000 Realized Price: Historically, bear market bottoms often touch or briefly dip below the average on-chain cost basis (Realized Price).
   The core basis for this judgment lies in the exhaustion of institutional demand—ETFs actually became net sellers in Q4, a rare phenomenon since their launch. This means the engine that powered this bull run has stalled.

3.2 MicroStrategy's Reincarnation: Strategy Inc Officially Debuts

Event Recap: Led by Michael Saylor, MicroStrategy officially completed its rebranding to Strategy Inc, keeping the ticker MSTR.⁸

Deep Dive:

This is a symbol of the era. Dropping "Micro" to leave just "Strategy" symbolizes that this company is no longer a software firm that holds Bitcoin, but one where Bitcoin is the core strategy of its existence.

• Ultimate Bet on Corporate Philosophy: This rebranding signals that Strategy Inc has tied its fate entirely to Bitcoin. It is no longer a tech company but a "Bitcoin Development Company" or "Bitcoin Treasury."
• Balance Sheet Restructuring: While its stock price fluctuated with BTC this week, this move signals an ultimate bet on the "Bitcoin Standard." In the future, we may see more companies emulate this model, using Bitcoin as a core reserve asset against fiat debasement.

3.3 BlackRock Leading the Retreat? Largest Daily ETF Outflows

Event Recap: On December 19, US Bitcoin Spot ETFs recorded a net outflow of $158.3 million, with BlackRock's IBIT alone accounting for $173.6 million of outflows.⁴ Prior to this, December 18 also saw net outflows of $161 million.¹⁷

Deep Dive:

A dangerous signal. IBIT was once the "inflow-only" anchor; seeing it bleed massive net outflows means Wall Street's "smart money" is engaging in year-end profit-taking or risk hedging.

• Tax-Loss Harvesting: Some outflows may be related to year-end tax planning, where investors sell losing positions to offset taxes.
• Macro Asset Rebalancing: With US Treasury yields remaining high (~4.5%), traditional institutions are reassessing risk asset allocations. When risk-free returns are this attractive, Bitcoin's high volatility becomes a burden for institutional portfolios.

3.4 North Korean Hackers Set Record: Over $2B Stolen in 2025

Event Recap: Chainalysis and other security firms reported that North Korea-linked hacking groups stole over $2.02 billion in cryptocurrency in 2025, accounting for over 60% of global thefts.¹⁸

Deep Dive:

Attacks are becoming "fewer in number but larger in impact." Hackers are shifting from exploiting DeFi protocols to attacking Centralized Exchanges (CEX) and custodians (the Bybit incident from February was cited repeatedly in annual summaries 20).

• Geopolitical Shadow: Stolen funds are likely used to fund sanctioned weapons programs, which will invite even stricter global regulatory crackdowns on the crypto industry.
• The Inevitability of Compliance: In 2026, the survival card for exchanges will no longer be listing speed or leverage limits, but Compliance and Security. KYC/AML scrutiny will reach unprecedented levels.

3.5 The Defiant Surge of Hyperliquid (HYPE) & The New King of DeFi

Event Recap: Against a backdrop of broader market decline, the token of decentralized derivatives platform Hyperliquid (HYPE) performed spectacularly, recording double-digit gains at times and boasting an 86.23% YTD increase.⁶

Deep Dive:

A classic case of "Alpha." The more volatile the market, the higher the demand for on-chain perpetuals (Perps).

• Extreme Product Fit: Hyperliquid offers a trading experience comparable to CEXs (low latency, deep liquidity) while retaining decentralized custody of funds.
• Sanctuary for Risk-Averse Capital: With frequent CEX security incidents (see Headline 4), whale capital is migrating on-chain. HYPE's rise validates the narrative of it being the "On-chain Binance."

3.6 Loopring (LRC) Delisted by Coinbase: The Curtain Falls on an Old Era

Event Recap: Coinbase officially suspended trading for Loopring (LRC) on December 15.⁵

Deep Dive:

Although Loopring was a pioneer of ZK-Rollups, the drying up of liquidity and the Coinbase delisting are fatal blows. This reflects the brutal consolidation of the Layer 2 sector—only top-tier projects will survive, while legacy "zombie chains" will be ruthlessly eliminated. The market no longer pays for "technical potential"; it votes only for "active users" and "real revenue."

3.7 US CPI Data Released: The Ghost of Inflation Lingers

Event Recap: The US Bureau of Labor Statistics (BLS) released November CPI data on December 18, showing a 2.7% year-over-year increase, meeting or slightly exceeding expectations.²¹

Deep Dive:

A 2.7% inflation rate combined with a 4.2% 10-year Treasury yield 23 creates a "High Rates + Sticky Inflation" macro environment. This significantly suppresses Risk Assets. The narrowing window for Fed rate cuts is the macro root cause of Bitcoin's inability to breach $100k. As long as inflation does not fall to the 2% target, the liquidity tap cannot be fully opened.

3.8 ADI Chain Mainnet Launch: National RWA Players Enter

Event Recap: The Abu Dhabi-based ADI Foundation announced the launch of the ADI Chain mainnet, designed specifically for governments and regulated institutions.²⁴

Deep Dive:

A national-level player joins the RWA (Real World Assets) race. Unlike grassroots DeFi innovation, this represents top-level design for Web3 infrastructure by Middle Eastern capital. ADI Chain will host national-level applications for identity, payments, energy, and real estate registries. In the future, compliant RWAs may be the only sector capable of carrying trillion-dollar capital.

3.9 Bitcoin Miner Revenue Plummets to Yearly Lows

Event Recap: As of this week, daily miner revenue has dropped from a Q3 average of $50 million to approximately $40 million, with active addresses hitting a 12-month low.²⁵

Deep Dive:

The start of a vicious cycle. Price drops -> Miner revenue falls -> Miners forced to sell BTC to pay electricity -> Price drops further. We are approaching the "miner shutdown price," which historically signals a bottom, but is often preceded by a final "Capitulation" crash.

3.10 Lambda Raises $1.5B: Is AI Draining Crypto?

Event Recap: AI cloud infrastructure provider Lambda completed a $1.5 billion Series E financing round.²⁷

Deep Dive:

While not a pure Crypto project, this reflects the true movement of Venture Capital (VC). Massive amounts of capital that might have flowed into Web3 infrastructure are being siphoned off by the AI sector. The fundraising environment for Crypto entrepreneurs in 2026 will be significantly tougher than in 2025. VCs now prefer to invest in Compute (AI) rather than the Ledger protecting that compute (Crypto).

4. Sector Deep Dive: The Alpha Hunt in a Zero-Sum Game

Based on DefiLlama data ¹⁴, the DeFi sector exhibited intense internal rotation this week. With total volume capped, capital is concentrating in top-tier protocols and high-performance chains.

4.1 High-Performance Chains

• Leaders: Solana, Sui, Hyperliquid L1
• Weekly Performance: Although Solana fell ~3.6%, trading volume for derivative protocols within its ecosystem did not significantly decline. Hyperliquid moved up against the trend, becoming the brightest star this week.
• Deep Logic: The market is rewarding "Real Yield." Fee revenue generated by Hyperliquid directly supports its token price, a logic similar to traditional stock buybacks. In contrast, protocols maintaining TVL solely through inflationary rewards are suffering severe capital flight. High-performance chains are becoming the main arena for on-chain high-frequency trading, siphoning retail traffic from Ethereum Mainnet.

4.2 Ethereum Mainnet

• Status: TVL Dominance at 54.82% ¹⁴, remaining the absolute hegemon.
• Weekly Performance: In moments of panic, capital tends to flow back to blue-chip protocols on Ethereum Mainnet (e.g., Aave, Maker/Sky). Although ETH price is weak, its "Internet Bond" safe-haven attribute is emerging.
• Concern: Ethereum is losing its "Innovation Premium." Aside from serving as a secure settlement layer for capital, its competitiveness in the application layer is being eroded by L2s and high-performance L1s due to Gas fees and speed limitations.

4.3 RWA (Real World Assets)

• Key Event: ADI Chain launch ²⁴, BlackRock BUIDL fund continued operations.
• Sector Insight: RWA tokens in the secondary market performed weakly this week (e.g., Ondo, CFG) because they are often viewed as Beta assets. However, during liquidity crunches, the underlying Treasury yields (~4.5%) become the final yield sanctuary in DeFi. Massive amounts of stablecoins are flowing into tokenized treasury protocols seeking risk-free returns rather than high-risk gambling in DEXs.

5. On-Chain Highlights: A Fading Pulse

This week's On-Chain Data is chilling, revealing deep vulnerabilities in the market. Sources include The Block and Glassnode.

AscendEX View: The comprehensive deterioration of on-chain data is the most direct evidence of a bear market. Unlike prices which can be manipulated short-term, the decline in on-chain activity reflects the true temperature of the ecosystem. Unless a new phenomenal application emerges (like DeFi Summer or the NFT craze), on-chain data is unlikely to see a V-shaped reversal in the short term.

6. Fundraising & Project Updates: AI's Feast vs. Web3's Famine

The primary market fundraising landscape for this week (Dec 15–21) shows extreme polarization. Capital has the keenest sense of smell, and its flows presage industry hotspots for the next 1-2 years.

6.1 Mega-Rounds: AI Draining Capital

• Lambda ($1.5B): AI Compute Infrastructure.²⁷ While not pure Crypto, it reflects real VC movement. Massive capital that should have flowed into Web3 infrastructure is being siphoned by AI.
• Kalshi ($1B): Prediction Markets. Though involving Crypto elements, it's categorized more as Fintech/AI.²⁷
• Kraken ($800M): Exchange Infrastructure.²⁷ Capital prefers betting on "shovel sellers" rather than gold diggers.

6.2 Web3 Native Funding: Focus on Infrastructure

• Real Finance ($29M): RWA Infrastructure.³¹ RWA is one of the few Web3 sectors still capable of telling a big story.
• TenX Protocols ($22M): Focused on institutional staking and validator operations.³¹

AscendEX Insight:

Financing for pure Web3 application layers is extremely difficult. VC logic is clear: invest in AI (Productivity Revolution) or Compliant Infrastructure (Kraken/RWA). For "Money Lego" DeFi protocols in the middle, the checkbook is closed. The fundraising environment for Crypto entrepreneurs in 2026 will be tougher than in 2025; prepare for winter.

6.3 Key Token Unlock Alerts

• Sign Protocol (SIGN): Will unlock 96.67 million tokens on December 28.³²
• LayerZero (ZRO): Unlocked 25.71 million tokens this week.³³
• Risk Warning: In a liquidity-drained market, such massive unlocks are likely to trigger severe sell pressure. Market maker willingness to absorb is low; holders must be highly vigilant against price drops.

7. Regulation & Macro: Inflation's Ghost & The Compliance Siege

7.1 US CPI Data: Shattering Rate Cut Fantasies

The November CPI data released on Dec 18 showed a 2.7% YoY increase.²¹ This shattered market fantasies of a significant Fed rate cut in January. The Fed is now in a bind: cutting rates could reignite inflation, while holding rates could prick asset bubbles. This uncertainty is the crypto market's biggest enemy. As long as the risk-free rate remains above 4%, crypto assets struggle to command a significant premium.

7.2 Regulatory Dynamics: Compliance is the Only Way Out

• Regulatory Game Behind MicroStrategy Rebrand: The emergence of "Strategy Inc" challenges existing corporate law and accounting standards. It tells regulators: Bitcoin is not an "intangible asset"; it is our "currency." This may trigger further scrutiny from the SEC and FASB.
• North Korean Hackers & Sanctions: With record theft amounts by North Korean hackers, the US Treasury and global regulators will inevitably tighten regulations on mixers and non-custodial wallets. DeFi protocols may face stricter KYC requirements, suppressing innovation in the short term but paving the necessary path to mainstream adoption in the long term.

8. A Picture is Worth a Thousand Words: CoinGlass Derivative Data

Core Chart Interpretation:

1. Liquidation Magnet ($85,000): A massive pile of long liquidation orders sits at the $85,000 line. This acts like a magnet, pulling price down to test it. Market makers have an incentive to push price to this zone to access liquidity. A break below $85,000 could trigger a Liquidation Cascade, instantly dragging price to $80,000 or lower.

2. Negative Funding Rates: Funding rates broadly retreated to neutral or even negative values this week.² This indicates a massive retreat of long leverage, with shorting sentiment emerging. While often a sign of a local bottom, under macro pressure, low rates can persist for a long time, forming a "slow bleed" trend.

3. Options Max Pain: Massive options expiry is set for next week (Dec 26).³⁵ The Max Pain point is far below current prices, meaning option sellers (institutions) have an incentive to suppress price to close near the pain point, rendering buyers' options worthless.

9. Outlook for Next Week (December 22 – December 28, 2025)

Keywords: Low Liquidity, Christmas Crash Risks, Year-End Clearing

Next week is the final week of 2025 and likely the most liquidity-drained week of the year.

• Dec 22-24 (Pre-Christmas): Expect the market to continue testing the strength of the $85,000 - $88,000 support. As Wall Street traders head out for holidays, liquidity will dry up further, making the market prone to "Bart Simpson" patterns (large volatility driven by small capital). Any breaking news could be amplified.
• Dec 25 (Christmas Day): US markets closed, ETFs halted. Crypto markets enter "autopilot" mode. Beware of abnormal volatility during Asian trading hours; history shows holidays often see sniping attacks on weak liquidity.
• Dec 26 (Pre-Expiry): Implied Volatility (IV) may spike as the year's largest options expiry approaches.
• Dec 28 (Sunday): Watch the massive unlock for Sign Protocol (SIGN) ³² and whether Hyperliquid (HYPE) can maintain its independent momentum.

AscendEX Strategy Advice:

In this phase, Cash is King. Unless you are a dollar-cost averaging believer, do not attempt to catch falling knives. Watch the $85,000 level closely. If trading short-term volatility, pullbacks in strong assets like Hyperliquid (HYPE) might offer opportunities, but strict stop-losses are non-negotiable. For long-term investors, now is the best time to deeply research project fundamentals and find seeds for the next bull run, rather than anxiously staring at charts.

10. Conclusion & Call to Action: Finding Alpha in Despair

Just as Michael Saylor rebranded his company to Strategy Inc, in this turbulent end to 2025, each of us needs to re-examine our own "Investment Strategy."

CryptoQuant says the bear market has started, but this does not mean the end of opportunity. Conversely, history tells us that true Alpha is often born in the moments when everyone else is in despair. When the tide goes out, those protocols still building real applications and generating real revenue (like Hyperliquid, RWA infrastructure) will emerge.

Bear markets are accelerators of wealth transfer and the best windows for cognitive upgrades. Do not waste this crisis.

Stay Hardcore, Stay Solvent.

— Bin Huang

AscendEX Research Institute