GM. This is Milk Road PRO, the market breakdown sharper than your barber’s fade.
Crypto just wrapped up another brutal month.
After a rough October, many were hoping for a turnaround in November. Instead, the market dropped another 20% and wiped out 700 billion dollars in value.
If you're surprised, you're not alone.
We were also expecting a strong finish to the year, but so far Q4 isn’t living up to the hopes.
To be fair, 2025 has been strange and hard to read. 😤
Even experienced portfolio managers are falling behind, with many underperforming the market.
Naturally, the big questions are back.
- Is crypto still a good investment?
- Or was it just a bubble that’s now slowly deflating?
- Could prices fall even further from here?
These are exactly the kinds of questions investors should be asking.
It’s also important to remember that crypto is still a young and not a fully matured market.
Prices can swing wildly in both directions and often move far away from what the fundamentals would suggest.
✍️ Big rallies can turn into deep crashes, even for assets that seem solid on paper.
In this report, we’ll take a closer look at recent price moves and add some much-needed context.
Are prices following the fundamentals, or is the market out of sync?
We’re digging into real onchain data. It might reveal a different picture than what the price suggests. Or maybe it won’t.
Either way, this analysis could help us spot a possible bottom or find insights that make it easier to navigate these uncertain times.
PS: Oh, and we recorded the Market Pulse meeting we just had. If you want to hear our thoughts, you can check it out here.
Let’s take a look.
The Business Cycle
The business cycle is the foundation of how we understand the trend and direction of markets – if you’re new here, you can learn more about how the business cycle impacts crypto markets here.
The chart below shows the ISM, which gives us a pretty solid clue about where we are in terms of economic activity right now.
The latest ISM numbers for November came in at 48.2, that’s down from 48.7 last month (October) and also below the expected 49.0.
Not exactly great news, and it suggests the business cycle isn’t picking up speed just yet. The contraction in the manufacturing sector is continuing at a slightly faster rate.
But if you look a bit deeper, there's a silver lining in some components. Production actually jumped into expansion (51.4 compared to 48.2 in October).
That's encouraging, since Production measures actual output, but the dip in New Orders data suggests that growth might be difficult to sustain.
So, the picture is mixed, and we're not quite turning the corner yet. This might struggle into 2026, but with the impact of the Big Beautiful Bill incentivizing re-investment into manufacturing in the U.S., this could change quickly, so we’re watching this closely.
Let’s look at liquidity next.
Global liquidity
Global liquidity tells us how much capital is flowing into the markets. And generally, the more liquidity (or the faster it’s rising) the better it is for risk-on assets like crypto.
Let’s be honest, the liquidity situation has been tight for a long time.
The global liquidity situation is currently mixed and tightening in core Western economies, while some Asian central banks have been accommodative.
First, it was the U.S. Treasury Department refilling its General Account. Then, it was the government shutdown that prevented the executive branch from spending money.
The U.S. Federal Reserve's quantitative tightening (QT) has continued to drain dollar liquidity, which has a widespread impact due to the dollar's dominance.
However, this policy FINALLY ended on Dec 1st, and many analysts expect the Fed to begin to add to their balance sheet in 2026.
To be clear, this doesn’t mean we expect them to go to all out QE soon, but it is a step in the right direction.
Everyone is watching closely to see if there will be another rate cut at the Fed’s FOMC meeting on Dec. 10th.
Trump’s new Fed Chair will likely continue lowering rates in 2026.
So, eventually, liquidity will come back.
Truflation
Instead of looking at traditional trailing inflation metrics, we’re turning to Truflation for a real-time view of what’s actually happening on the ground.
Inflation is still above the Fed’s target of 2%, but they seem pretty okay with that for now.
The U.S. inflation situation is improving, but we only have so much data on this because there wasn’t any data for October due to the government shutdown.
The key challenge lies in core inflation (excluding volatile food and energy prices), which has been stickier at approximately 3.0% (CPI).
Shelter costs are the largest contributor to this persistence.
The Fed is still watching this closely, and so are we, but for the time being, no major concerns coming up here.
PERFORMANCE
Let’s see how some major investment classes have been performing.
U.S. equities held up pretty well and finished more or less where they started.
Gold even added nearly 6% after pulling back in the previous months.
👉 So if you just looked at those, you wouldn't think anything dramatic happened. Overall, the market looks fairly stable.
And yet, crypto tells a different story. It’s down around 20% and clearly lagging behind.
When everything else is holding steady, it’s a sign that there aren’t any major macro factors driving this drop.
Which means the reason for crypto’s slide is likely coming from somewhere else and we still need to figure out what that is.
Uh, Oh… 😧 The rest of this report is exclusive to Crypto PRO or PRO All Access members!
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WHAT’S LEFT INSIDE? 👀
- Why the altcoin season index is broken
- What Fear and Greed is really telling us right now
- What are we building to help you navigate this madness
- Where we’re allocating this month’s $1,000 investment and why
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