Bitcoin experienced a struggle to maintain its momentum following the Federal Reserve's decision to implement a 25-basis-point rate cut on December 10, marking the third reduction of 2025. Typically, lower interest rates tend to support risk assets, but the market's interpretation of the move was that it was not sufficiently dovish. Further contributing to the uncertainty were the cautious remarks made by Chair Jerome Powell regarding the potential pace of future rate cuts, which ultimately limited the impact of the Fed's decision.
The price of Bitcoin briefly climbed to $94,000; however, this upward movement quickly faded as traders began to question whether the prevailing macroeconomic environment could justify sustained price increases. Profit-taking activities accelerated significantly after Bitcoin failed to hold its position within the critical resistance zone of $93,000 to $94,000, an important psychological barrier that has repeatedly capped its upward momentum.
Technical Structure Shows Signs of Weakness
Bitcoin has broken below key technical indicators, including its 50-day simple moving average (SMA) at $91,516 and its 200-day SMA at $108,941. This breach confirms a shift towards a more bearish market structure. The current momentum indicators suggest hesitation rather than a recovery in price action.
The Relative Strength Index (RSI) is currently positioned at 45.3, indicating neutral to negative market conditions. The Moving Average Convergence Divergence (MACD) histogram remains mildly positive but does not signal a clear reversal trend.
The price is now testing Fibonacci support levels, specifically within the range of $88,000 to $89,000. This zone has previously acted as a stabilizing level during earlier price pullbacks. The repeated failures to reclaim the $93,000 level have led to a shift in market expectations, with traders now anticipating lower price targets. A daily close below $88,000 could potentially accelerate selling pressure, pushing the price towards $85,000, particularly if derivative liquidations begin to cascade.
Macro Sentiment Remains Unsettled
The market's reaction highlights a disconnect between the expectations of traders and the Federal Reserve's measured approach. Many market participants had anticipated stronger forward guidance regarding future monetary easing. Instead, Powell's emphasis on caution tempered risk appetite across various financial markets.
Bitcoin's inability to capitalize on a rate cut, which is typically considered a bullish event for risk assets, signals broader uncertainty regarding current economic conditions and the sustainability of rallies driven by increased liquidity.
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BTC Price Outlook: Critical Test at $89K
Bitcoin is currently positioned at a crucial support level. Successfully holding the $88,000 to $89,000 range would provide an opportunity for the market to stabilize and potentially retest the $93,000 resistance level. Conversely, a breakdown below this support could lead to a continuation of selling pressure, with the price potentially moving towards $85,000.
For the time being, the subdued reaction to the recent rate cut underscores a market that is actively awaiting clearer signals, whether these emerge from evolving macroeconomic conditions or from decisive price action itself.