Bitcoin Price Action and Key Levels
Bitcoin (BTC) is trading above $90,000 as discussions around a "Santa rally" begin for the second week of December.
The BTC price is encountering resistance in the low $90,000 region, though some traders anticipate a further dip before any significant upward movement.
Traders remain cautious of potential fakeout moves in both directions.
Trader CrypNuevo, in a recent X thread, identified the 50-day exponential moving average (EMA) as a potential retest target for shorts. He forecast that this level would adjust around $95,500, representing the range highs.
CrypNuevo also noted that Bitcoin lacked a "clear base" for long positions, leaving the low $80,000 zone as a possibility.
He added that while there were liquidations in both directions, with slightly more to the upside between $94,500 and $95,300, he would look for short signals if the price reached that zone, targeting a potential retest of the low $80,000s, based on exchange order-book liquidity data.
Conversely, crypto trader Michaël van de Poppe expressed more optimism, highlighting "intense" buying pressure at local lows for Bitcoin. He anticipated a breakout upwards and a hold above $92,000 in the coming days, which could lead to a rally towards $100,000 before 2026.
“That would result in a rally towards $100K pre-2026.”
For downside support, trader Daan Crypto Trades pointed to Fibonacci retracement levels, marking $84,000 as a critical level for bulls. This level was retested at the start of December.
He stated that the .382 area of the entire bull market so far was still being held, emphasizing its importance as a key area for bulls to defend. He noted that it represents the last major support before testing the April lows again, which would break the high timeframe market structure.
“I think this is a key area for the bulls to defend. It's also pretty much the last major support before testing the April lows again, which would break this high timeframe market structure.”
Federal Reserve Decision Looms Over Markets
This week's macroeconomic focus is squarely on the Federal Reserve, with limited other US data releases scheduled.
The Federal Open Market Committee (FOMC) is set to meet on Wednesday to decide on interest rates, and market consensus suggests a 0.25% cut is likely.
Recent labor market data indicates a deterioration, increasing the perceived need for a rate cut. However, analysis suggests the Fed faces a dilemma, as inflation remains a concern that could be exacerbated by a rate reduction.
The trading resource The Kobeissi Letter highlighted that nonfarm payrolls have declined in five of the last seven months, marking the worst streak in at least five years. They commented that the deterioration of the job market is accelerating.
“Deterioration of the job market is accelerating.”
Analytics resource Mosaic Asset Company presented a more optimistic outlook, seeing an ideal combination of factors supporting risk assets. They noted that with inflation above target, the economy remaining robust, and the S&P 500 near all-time highs, the Fed appears poised to cut rates for a third consecutive meeting.
Mosaic Asset Company added that they "can't imagine more bullish conditions to help drive the stock market than rate cuts into loose financial conditions with the economy showing signs of continued growth which supports the earnings outlook."
On FOMC day, markets will closely monitor Fed Chair Jerome Powell's speech and press conference for insights into future policy direction following the rate announcement.
May 4th, 2024: The day the Fed lost control.
— The Kobeissi Letter (@KobeissiLetter) December 6, 2025
Fed Chair Powell responds to concerns about stagflation, "I don't see the stag or the flation."
18 months later, inflation is still at 3%+ and the labor market is at its weakest level since the pandemic.
Own assets. pic.twitter.com/gpBdXnfH7Y
"Santa Rally" Hopes and Caveats
If the stock market is positioned for a strong year-end rally, crypto commentators are also discussing the potential for a "Santa rally" to extend into digital assets.
The Santa rally is real, but the timing is all over the place.
— Mister Crypto (@misterrcrypto) December 6, 2025
Will we get a Santa rally this year? 👇 pic.twitter.com/YnsAjXqBbx
As previously reported, crypto has significantly underperformed stocks in the fourth quarter, with the S&P 500 nearing new all-time highs.
Network economist Timothy Peterson notes that Bitcoin's historical performance tends to align with positive year-end trends more often than not.
However, Joao Wedson, founder and CEO of crypto analytics platform Alphractal, holds a different view. He argued that BTC/USD is likely to experience a sideways end to 2025.
Wedson explained that Bitcoin historically spends an average of 170 days in negative territory annually. In 2025, it has already accumulated 171 negative days, strongly suggesting that the year is likely to close within a sideways price range. He believes that any significant drop is more probable in 2026.
“Every year, Bitcoin spends an average of 170 days in negative territory. In 2025, it has already accumulated 171 negative days — which strongly suggests this year is likely to close in a sideways price range. If a deeper drop is coming, it will most likely happen in 2026.”
Earlier reports indicated that the outcome of the "Santa rally" was still heavily dependent on the Federal Reserve's actions.
Mosaic Asset Company agreed, stating that the pullback in the S&P 500 from late October into November coincided with falling odds for another rate cut this month. They noted that recent comments from key Fed officials helped to increase the odds for a cut, which in turn sparked a recovery in the stock market.
Historical Parallels: $89,000 as the New $16,000?
When considering Bitcoin price cycles and seasonality, current data offers bulls confidence in the long-term outlook.
Comparisons between BTC/USD this year and in 2022-2023 suggest that a long-term price bottom is either complete or imminent.
In late 2022, Bitcoin reached a multiyear low of $15,600, marking the bottom of a severe bear market where it lost 80% from its all-time highs. Its subsequent rebound began at the start of 2023, and if historical patterns repeat, upward momentum could return within weeks.
Peterson summarized this sentiment by stating, "$89,000 is the new $16,000."
Comparisons to 2022 have become more frequent since October, when Bitcoin experienced a significant 36% drop over six weeks, deviating from its pattern of successive new all-time highs.
In late November, Peterson indicated that the price correlation with 2022 had reached 98% on monthly timeframes.
Derivatives Market Signals "Apathy"
Encouraging signals from Bitcoin's derivatives markets suggest that a sustained market rally remains possible.
New data from on-chain analytics platform CryptoQuant indicates that open interest (OI) across Bitcoin exchanges has fallen to its lowest levels since April, when BTC/USD was trading at $75,000.
Contributor COINDREAM commented that this decline typically reflects either investor capitulation or investor apathy. They noted that historically, periods of apathy and low participation have often presented attractive buy-the-dip opportunities.
“This decline typically reflects two things: 1) investor capitulation, or 2) investor apathy. Historically, periods of apathy and low participation have often marked attractive buy-the-dip opportunities.”
COINDREAM observed that despite a modest BTC price rebound from recent lows of $80,500, traders have not been enticed to deploy leverage.
They continued by stating that excessive leverage usually acts as a drag on market direction. However, as prices have recently rebounded, leverage levels have normalized, reducing systemic risk.
CryptoQuant's estimated leverage ratio metric, which divides OI by BTC reserves, has shown a significant decline since mid-November.
