Market Snapshot: Bitcoin Under Pressure Before Federal Reserve Announcement
Bitcoin (BTC) traders are closely monitoring the clock as the Federal Reserve prepares to deliver its final interest-rate decision of 2025 on Wednesday, December 10. The cryptocurrency is currently trading near $91,500, having experienced a significant drawdown of nearly 30% from its October peak of $126,000. This has led to market speculation about whether six-figure prices can be reclaimed before the end of the year.
The prevailing sentiment in rates markets indicates a leaning towards easier monetary policy. The CME FedWatch tool shows approximately 87% odds of a 25 basis point interest rate cut. Furthermore, the on-chain prediction platform Polymarket suggests an implied probability close to 93% for looser financial conditions. The Federal Open Market Committee (FOMC) is scheduled to meet on December 9 and 10, with Fed Chair Jerome Powell set to address investors at 2:30 p.m. ET on Wednesday.
The current sentiment surrounding Bitcoin stands in stark contrast to the euphoria that propelled the asset above $100,000 in October. The Fear and Greed Index currently registers at 23 out of 100, reflecting a deep sense of caution among investors. Bitcoin ETFs experienced outflows totaling approximately $194.64 million on Thursday, with BlackRock's iShares Bitcoin Trust (IBIT) accounting for about $112.96 million of that amount. During the early December sell-off, nearly $1 billion in leveraged long positions were liquidated.
Analyzing Potential Federal Reserve Scenarios and Their Impact on Bitcoin
Analysts specializing in cryptocurrency and macroeconomics have outlined three primary scenarios for Wednesday's announcement and the subsequent press conference, each carrying distinct implications for BTC.
Base Case: Quarter-Point Cut and a Mild Relief Rally
In the most anticipated scenario, the Federal Reserve implements the expected 25 basis point rate reduction and signals a path forward with approximately three additional cuts anticipated into 2026. Fed Chair Powell is expected to acknowledge moderating price pressures while still emphasizing vigilance regarding inflation. Given that rates traders have largely priced in this outcome, Bitcoin might experience only a modest recovery.
Under this scenario, BTC could see a gradual upward trend, but buying power might fall short of a rapid return to the $100,000 mark. The sustained recovery of Bitcoin's price would likely depend on improvements in ETF flows, global risk appetite, and balance-sheet data from significant holders before buyers can regain full control.
Dovish Surprise: Extra Fuel for Bitcoin Bulls
A more accommodative message from the Federal Reserve would significantly alter market sentiment. Deeper rate cuts in the updated projections, or language that clearly prioritizes economic growth over inflation concerns, could incentivize investors to move towards riskier assets.
Tom Lee from Fundstrat maintains a price target of $150,000 for Bitcoin, linking this forecast to broader liquidity improvements expected in 2026. Historically, bull runs have gained momentum when central banks expanded their balance sheets and lowered real yields. A similar pattern emerging now would bolster the argument for renewed upside potential in BTC as traditional yield-bearing assets become less attractive.
In such a scenario, increased ETF inflows, favorable credit conditions, and weaker real interest rates could attract fresh capital into crypto markets. While price projections remain speculative, traders who closely follow macro liquidity signals are reportedly preparing strategies for a more supportive stance from the Federal Reserve.
Hawkish Tone: Deeper Drawdown and Forced Deleveraging Risk
A restrictive signal from the Federal Reserve would have a more severe impact on cryptocurrency sentiment. Fewer projected interest rate cuts, or a pronounced emphasis on persistent inflation, could trigger aggressive selling in Bitcoin, potentially pushing its price towards the $70,000–$80,000 support zones.
The danger is amplified in derivatives markets. Some exchanges currently offer leverage of up to 200x, and the open interest in perpetual futures hovers near $787 billion. A sharp decline below key price levels could force liquidations across highly leveraged positions, accelerating losses beyond what spot market flows alone would indicate. Under these conditions, established support levels could transform into stress points, testing the market's capacity to withstand leveraged positions.
December Liquidity and Technical Stress Around Key Levels
Seasonal trading patterns introduce an additional layer of complexity. Trading desks often operate with reduced staff and trading volumes in December. Technical analysts anticipate that Bitcoin may trade within a range of $85,000 to $95,000 if no clear market trigger emerges. Given the shallowness of order books during this period, even modest blocks of selling or buying activity can lead to outsized price movements.
Technical charts also indicate a significant break in a long-term indicator. Bitcoin recently fell below its 10-month moving average for the first time in nearly four years, a development that concerns many trend-following traders. The price action around this key level following the Federal Reserve's decision will be crucial in determining whether this break signifies the start of a deeper downtrend or proves to be a temporary deviation.
Long-Term Targets Remain High Despite Sharp Pullback
Despite a recent decline of approximately 30% from its October peak, several financial institutions are maintaining highly optimistic price forecasts for Bitcoin. Standard Chartered projects Bitcoin to reach $200,000 by early 2026. Bernstein outlines a similar price range, underpinned by the steady growth of BTC ETFs and increasing institutional adoption.