Bitcoin News Today: December Fed Decision: Bitcoin's Lifeline or Deeper Slump?

Bitcoin traders have turned cautiously optimistic as the probability of a U.S. Federal Reserve rate cut in December surged to 69.40% within 24 hours. The sharp shift, driven by dovish remarks from New York Fed President John Williams, has reignited debate over whether easing monetary policy could stabilize Bitcoin's price after a week of more than 12% losses according to market analysis.

The Fed's potential pivot has become a focal point for crypto markets, with analysts split on its implications. Bank of America's Michael Hartnett argued that the 35% decline in Bitcoin and 45% drop in Ethereum signal a liquidity crisis demanding Fed intervention. "Crypto is the frontier of liquidity and speculation," he noted, predicting that the first signs of Fed capitulation would emerge in digital assets. Meanwhile, Coinbase Institutional highlighted that futures markets have mispriced the likelihood of a rate cut, factoring in new tariff research and inflation trends that could justify easing.

Williams' comments, which suggested rate cuts could occur "in the near term" without compromising inflation control, were interpreted as a green light by traders. Social media chatter quickly turned bullish, with analysts like Moritz speculating that a Fed pivot might help Bitcoin establish a price floor according to market analysis. However, veteran economist Mohamed El-Erian cautioned against overreacting, warning that traders risked reading too much into a single speech according to economic analysis.

The market's mixed signals are reflected in Bitcoin's volatile trajectory. While the asset briefly dipped below $86,000-a six-month low- it remains 32% below its October peak. Technical analysts point to the $83,500–$85,000 range as critical support, with a breakdown potentially extending the slide toward $70,000 according to market analysis. On-chain data also revealed heavy liquidations exceeding $1.3 billion and ETF outflows surpassing $255 million, compounding downward pressure.

Regulatory uncertainty and macroeconomic headwinds further cloud the outlook. The Federal Reserve's shifting stance signaled by weaker-than-expected jobs data and stubborn inflation has eroded confidence in a December cut. Meanwhile, U.S. crypto mining firms face additional risks as investigations into Chinese ASIC producer Bitmain intensify, raising national security concerns.

Despite the near-term turbulence, some strategists remain bullish on Bitcoin's long-term prospects. Hartnett emphasized that global monetary easing, expected to materialize by 2026, could reignite risk appetite. Others, like Andre Dragosch of Bitwise, noted that oversold conditions and collapsing sentiment on platforms like Stocktwits could presage a reversal according to market analysis. "The market is pricing in a Fed pivot, but execution remains uncertain," Dragosch said.

For now, traders are bracing for a pivotal December meeting. The Fed's decision could either inject much-needed liquidity into crypto markets or deepen the current slump, depending on whether policymakers prioritize inflation control over economic growth. As one analyst put it, "Bitcoin's future hinges on whether the Fed chooses stability or capitulation."

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